We’ve spent a lot of time on this blog discussing the plight of working families struggling to save for retirement. It’s a challenge for many Americans to save for retirement with the decline of pensions in the private sector and the risky and unreliable nature of 401(k) plans. In previous posts, we’ve often focused on those working families nearing retirement age and facing the prospect of a lower standard of living in retirement. Today we want to focus on a younger generation, Millennials, and their retirement challenges.

A new report from the National Institute on Retirement Security examines the challenges facing Millennials and where this generation currently stands in preparing for retirement. As a generation, they have faced a number of financial and economic obstacles. Many graduated from college and began their careers during the Great Recession, which has proved to have long-lasting effects on them. Compared to previous generations at this point in their lives, they are less likely to own a home, have earned less, and accumulated less wealth.

These financial challenges have real implications when it comes to saving for retirement. Two major obstacles facing many Millennials are access and eligibility for employer-sponsored retirement plans. Only two-thirds work for an employer that offers a retirement plan, comparable to Generation X (“Gen X”) and Baby Boomers (“Boomers”). However, just over half are eligible to actually participate in that plan–a significantly lower number than the previous two generations. This question of eligibility becomes very important. When they are eligible to participate, they do participate at the same rate as previous generations. Unfortunately, the lower eligibility rate means that just over a third of Millennials are actually participating in an employer-sponsored retirement plan, compared to half of Gen X and Boomers.

Why do Millennials have lower eligibility rates for employer-sponsored plans? Part of the explanation is that they are employed part-time at nearly double the level of the previous two generations. Part-time employees often are not able to participate in an employer-sponsored plan. Additionally, half have worked for their current employer for a year or less, which can also restrict participation eligibility. The consequence of this lower eligibility is that two-thirds of working Millennials have nothing saved for retirement.

Millennials working in the public sector are not immune from these challenges either. In many states that have closed or cut public pension plans, those changes typically apply to “new hires”, or people hired after a specific date. In states that have made significant pension plan changes, Millennials and other new workers are often either ineligible to participate in a public pension plan or must participate in a new tier with higher costs and lower benefits. This will weaken retirement security for public employees for decades to come.

The United States faces a looming retirement security crisis. Each generation has its own unique challenges in preparing for and financing retirement. Millennials, however, have encountered distinct challenges due to the economic circumstances that have hindered their ability to save.