Industry News

On August 4, 2020, the Center for Retirement Research at Boston College (CRR) released its issue brief, How Do DI Benefits for Uncovered Public Workers Compare to SSDI?  The brief compares the disability insurance (DI) benefits for uncovered state and local workers to the benefit that workers would have earned from the Social Security Disability Insurance (SSDI) program.  CRR analyzed the rules governing DI benefits in 67 state and local programs (known as “Social Security-replacement” programs) that include about 70% of all uncovered public sector workers.

Key findings include:

• About 25% of state and local workers are not covered by Social Security and get their disability insurance (DI) from their current employer.
• Most state and local DI programs provide relatively generous protection.
• Typically, long-tenured employees that are at greater risk of experiencing a disability have higher benefit replacement rates.
• By comparison, state and local DI programs require that workers are incapable of performing their current job, while Social Security requires that workers are unable to perform any job.

The brief concludes, “older workers who spend their full careers in government earn benefits that are more generous than SSDI.  Their short-tenured colleagues fare better than SSDI, but older short-tenured workers who are most at risk of needing DI and also likely to be eligible for a partial SSDI benefit earned through previous covered employment.”

CRR created a new dataset to compare the state and local DI programs to Social Security based on eligibility standards and benefit provisions.  The dataset will be available for public use on their website in the fall of 2020.

The brief is available here.