How Prepared Are State and Local Workers for Retirement?

Publication Date: October 2011

Publisher: Center for Retirement Research at Boston College

Author(s): Alicia H. Munnell; Jean-Pierre Aubry; Joshua Hurwitz; Laura Quinby

Research Area: Economics; Labor

Keywords: state-local; workers; pension; HRS

Type: Report

Coverage: United States

Abstract:

A widespread perception is that state-local government workers receive high pension benefits which, combined with Social Security, provide more than
adequate retirement income. The perception is consistent with multiplying the 2-percent benefit factor in most plan formulae by a 35- to 40-year career and
adding a Social Security benefit. But this calculation assumes that individuals spend enough of their career in the public sector to produce such a retirement outcome. This brief summarizes the results of a paper
that uses the Health and Retirement Study (HRS) and actuarial reports published by state and local pension systems to test the hypothesis that state-local workers have more than enough money for retirement.