One big trend is: no job, no 401(k). But even among the employed, participation is down. By Karen Mracek, Associate Editor November 10, 2010 More evidence that Americans aren't saving enough for their retirement: Workers' participation in 401(k)s is down, both in absolute terms and as a share of the workforce. After hitting a high of 54.6 million full-time workers in 2000, participation slipped to 48.4 million last year, according to research by the Employee Benefit Research Institute (EBRI).The number is expected to continue to drop. By 2012, only about 50% of workers will be taking part in the employer sponsored plans, down from 54.4% this year and 59.8% in 2000. Unemployment is weighing heavily on workers' ability to save for retirement. The number of workers participating in employment-based retirement plans hit its lowest level since 1997. This is largely attributable to the decline in the number of workers as unemployment hovers around 10%. A decline in the availability of employer sponsored plans is another cause. Just 61.8% of employers offered plans to full-time employees last year, compared with 68.6% in 1999. Many private sector employers have done away with traditional defined benefit pension plans, and in the recent recession, many have frozen or cut matching contributions, reducing the incentive to participate. Advertisement "This trend has important implications for workers, since having more opportunities to participate in an employment-based retirement plan greatly increases the amount of money a retiree is likely to have in retirement," says Craig Copeland, senior research associate at EBRI. On the bright side, the number of hardship withdrawals and loan requests remains steady. Neither is expected to grow significantly over the next year, demonstrating the commitment of participants to stay the course in saving for retirement. Still, lawmakers are worried. Sen. Tom Harkin (D-IA), chairman of the Senate Committee on Health, Education, Labor and Pensions, is promising a hard look next year at the impact of firms shifting from defined benefit to defined contribution plans. "We are facing a future where no one other than the rich will have the opportunity for a safe and secure retirement," he said at a committee hearing in October. "People that work hard for their entire lives will find themselves teetering on the brink of poverty, unable to pay the basic costs of living," he said. "That is going to have drastic consequences for families and our country as a whole." Advertisement But solutions will likely be elusive. One proposal, by Sen. Jeff Bingaman (D-NM) and Rep. Richard Neal (D-MA), would require employers to put up to 3% of workers' pay in an IRA if employees aren't offered an employer sponsored plan. Republicans will fight the proposal, arguing that it would be burdensome to small businesses. The problem will also complicate discussions over larger retirement issues, including the already thorny subjects of Social Security and Medicare benefits. It's clear that "the system is failing many Americans, and that the 'three-legged stool' of retirement security -- private pensions, personal savings and Social Security -- has gotten awfully wobbly," Harkin said at the October hearing.