Equable Institute has released the second edition of its Retirement Security Report, a comprehensive assessment of the retirement income security provided to U.S. state and local government workers. The report evaluates 1,953 retirement plans across the country—including 1,247 legacy plans—to determine how well public employees are being put on a path to secure and adequate retirement income.

The findings show a challenging landscape: while full-career public workers still tend to receive adequate retirement income, the majority of teachers, public safety officers, and general government employees who leave public service before a full career are not being well served by the retirement plans available to them.

 

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KEY FINDINGS:

  • Retirement benefit values have declined significantly: The expected lifetime value of retirement benefits for a typical full-career public employee has dropped by more than $140,000 since 2006, primarily due to policy changes after the Great Recession such as higher retirement ages, longer vesting, and reduced COLAs.
  • Only 46.6% of public workers are being served well by their retirement plans: While 76% of full-career workers are served well by their plans, just 17.2% of short-term workers are served well. In fact, most public workers who do not stay for a full career are unlikely to accumulate meaningful retirement income, regardless of plan type.
  • New plans serve short and medium-term workers better than legacy plans: There are zero “legacy” public retirement plans (those that are closed to new members today) that were serving Short-Term Workers well. Many of the new retirement plans created within the last 10 to 15 years have higher degrees of portability (hybrid plans, primary defined contribution plans, etc.) and higher member contribution rates, which creates a forced savings mechanism that boosts the value of accumulated retirement savings for those who leave without drawing a pension.

While the financial sustainability of public sector retirement systems shouldn’t be ignored, the Retirement Security Report is focused on the value those retirement systems provide as U.S. households navigate serious financial challenges.

To learn more about the Retirement Security Report, explore interactive scorecards for each plan, or download data, visit: RetirementSecurity.Report.