benefit plan fell from 62 percent to 20 percent. Conversely, during the same period the percentage of the workforce covered only by a defined-contribution plan grew from 12 percent to 63 percent. As of 2004, one-fifth of working Americans who were eligible to contribute to defined contributions made no contribution whatsoever. Less than 1 percent of workers earning less than $60,000 annually contribute the maximum. Among those earning between $60,000 to $80,000 annually, only 8.3 percent make maximum contributions. In fact, only 58 percent of Americans who make more than $100,000 a year contribute maximally. The situation among technical contractors is at least equally dire, if not more so. Although the well-educated and well-paid high-tech contractors whom Barley and Kunda81 interviewed were mostly in their 40s and 50s, 45 percent had no retirement account whatsoever. Another 20 percent had only an individual retirement account (IRA). Only 20 percent participated in a 401K or simplified employee pension (SEP) plan.


Stephen R. Barley and Gideon Kunda, Gurus, Hired Guns and Warm Bodies: Itinerant Experts in a Knowledge Economy, Princeton University Press, Princeton, N.J., 2004.

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