Industry News

On March 19, 2024, the Congressional Research Service (CRS) released its report, Social Security Coverage of State and Local Government Employees. The report focuses on Social Security coverage provided under current law for state and local government employees and also discusses issues related to proposals for mandatory coverage for newly hired governmental employees.

Over the years, there have been many proposals to make Social Security coverage mandatory for newly hired state and local government employees. As of 2021, there were nearly 21.9 million state and local government employees with about 15.9 million (73%) that participated in Social Security; however, about 5.9 million (27%) of these workers are not covered by Social Security through their government employment. The majority of noncovered state and local government employees work at the local level with the largest share being police officers, firefighters and teachers.

Every state has a combination of state and local government employees with and without Social Security coverage. As a result, every state would be affected by a Social Security coverage mandate. The impact on state and local plans and the net effect on total benefits would vary across plans as well as among individuals. 

Overall, in 2021, eight states accounted for about 76% of noncovered state and local government employees (California, Colorado, Georgia, Illinois, Louisiana, Massachusetts, Ohio and Texas) and three states accounted for about 49% of noncovered state and local government employees (California, Ohio and Texas). 

The report is available here.