Industry News

On April 12, 2022, the Center for Retirement Research (CRR) at Boston College released its issue brief, How Many Public Workers without Social Security Could Fall Short? CRR examined state and local government employees not covered by Social Security in their current job. About five million of those workers are not covered annually. Federal law requires a comparability standard that their pension plans provide a benefit equal to what they would have received upon retirement if they were covered by Social Security. However, it is important to determine whether state and local plans currently provide comparable benefits.

Other key findings include:

• Although all plans meet the requirements of the law, a previous study found that 43% were found to not provide lifetime benefits equal to Social Security for some workers.
• Often workers that terminate employment in mid-career may not have comparable benefits since their pensions are based on wages when they terminate and real value erodes over time.
• This group accounts for about 17% of current noncovered workers that may be at risk of falling short of Social Security equivalent resources in retirement.

The brief concludes, “Although relatively few workers may fall short of Social Security, the problem is still serious. Social Security is intended to provide a minimum level of retirement income for all Americans. Covered public sector workers – and many private sector workers – augment their Social Security benefits with employer-sponsored retirement plans. Thus, learning that hundreds of thousands of noncovered workers, in any given year, are at risk of not receiving that minimum is concerning.”

The brief is available here.