Research & Analysis by Jean-Pierre Aubry
Pensions for State and Local Government Workers Not Covered by Social Security: Do Benefits Meet Federal Standards?
Federal law allows certain state and local governments to exclude employees from Social Security coverage if the employees are provided with a sufficiently generous pension. Approximately 6.5 million such workers were not covered by Social Security in 2018. Retirement systems for noncovered workers have become less generous in recent years, and a few plans could exhaust their trust funds within the next decade, putting beneficiaries at risk. This article examines data from a variety of sources to assess whether state and local governments currently satisfy the federal standards for retirement plan sufficiency and whether the standards ensure benefits equivalent to those from Social Security.