Do All State and Local Workers Receive an Annuity in Retirement?

Jean-Pierre Aubry and Kevin Wandrei

State and Local Pension Plans Briefs from Center for Retirement Research

Abstract: The conventional wisdom is that all state and local government workers receive a lifetime annuity from their employer pension plan. This brief investigates the extent to which this presumption is correct by examining the payout options offered by state and local plans, including those for the roughly 6.5 million employees who do not participate in Social Security. Since these “noncovered” workers do not earn credit towards a Social Security annuity during their time in government, they need annuitized income from their employer plan more than their covered counterparts. The discussion proceeds as follows. The first section describes the most common benefit payout options for major state and local defined benefit (DB) plans and highlights the fact that some plans allow retirees to convert a portion of their annuitized benefit into a lump-sum payout. The second section focuses on state and local workers with defined contribution (DC) plans as their primary retirement plan and highlights the fact that most of these plans offer annuitization as an option but not as a default. The final section concludes that while most state and local workers receive an annuity, a small share do not.

Pages: 6 pages
Date: 2021-08
New Economics Papers: this item is included in nep-age and nep-ias
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://crr.bc.edu/briefs/do-all-state-and-local-w ... nuity-in-retirement/ R
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:crr:slpbrf:slp79

Access Statistics for this paper

More papers in State and Local Pension Plans Briefs from Center for Retirement Research Contact information at EDIRC.
Bibliographic data for series maintained by Amy Grzybowski () and Christopher F Baum ().