Pension Plans:

Many Workers Don't Know When They Can Retire

HRD-87-94BR: Published: Aug 12, 1987. Publicly Released: Sep 25, 1987.

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In response to a congressional request, GAO provided information on workers' knowledge of pension plan provisions related to normal and early retirement.

GAO noted that it used data from a 1983 consumer survey to estimate the number and characteristics of workers in defined pension plans who knew: (1) if they would be eligible for early retirement; and (2) when they would first be eligible for full or early retirement. Regarding early retirement, GAO estimated that in 1983: (1) over 40 percent of the 22 million workers in pension plans offering early retirement were either incorrect or did not know about their eligibility; (2) about 75 percent of the 12 million workers who were correct about being eligible were either incorrect or did not know about their eligibility date; (3) workers who would be eligible were from 3 to 17 times more likely to know about their eligibility than those who would not; (4) eligible workers who had education beyond high school were twice as likely to know they would be eligible as those who did not; (5) those who were more than 5 years from eligibility were 1.5 times more likely to know than those who were within 5 years of eligibility; and (6) women were from 2.5 to 5 times as likely as men to say that they did not know about their early retirement eligibility. Regarding full or normal retirement, GAO estimated that: (1) over 70 percent of the 25 million workers in pension plans were not correct about when they would be eligible; (2) men were 1.4 times more likely than women to know when they would be eligible; and (3) workers within 5 years of normal retirement were 1.8 times more likely than those more than 5 years away to know when they would be eligible.

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