Why Pensions Remain a Key Source of Income for Current Retirees Despite Declining Access

Even as access to traditional pensions has declined for today’s workers, the plans remain a key income source for many current retirees. The article cites Federal Reserve data showing that only 29% of American workers have an employer-sponsored defined benefit (DB) pension, with a steep age gap: 5% among workers aged 18–24 versus 52% for those 65 and older. It attributes the shift to the rise of 401(k)-style defined contribution plans beginning in the 1980s. The difference is also stark between sectors: as of March 2025, only 14% of private-sector workers had pension access, compared with 86% in state and local government. Among retirees, the Fed reports 52% have a pension, supported by EBRI/Greenwald’s 56% figure. Benefits diverge by public versus private plans, with a 2024 median of $11,440 per year in the private sector versus $24,930 for state and local government.