New Report Finds Public Pensions Play a Critical Role in Delivering Retirement Security for Older Americans While Reducing Wealth Inequality by Race and Gender

September 13, 2023 10:00 AM EDT

Report Supplemented by 51 Fact Sheets Detailing Pension Equity Impacts in States and Washington, D.C.

WASHINGTON and BERKELEY, Calif., Sept. 13, 2023 /PRNewswire/ -- A new report finds that defined benefit pensions play a critical role in delivering adequate retirement income for older Americans while providing a key buffer against economic hardship for women, Blacks, Latinos, and those without a four-year college degree. The report also finds that the wealth value of lifetime pension income, particularly from public pensions, is distributed more equitably by race and gender than other private financial assets, thereby narrowing the wealth gap among older families. For example, public pensions are a key pillar of Black middle-class economic security, increasing the median wealth of older Black families by 46 percent.

Pension income is distributed more equitably by race & gender than other financial assets, narrowing the wealth gap.

Closing the Gap: The Role of Public Pensions in Reducing Retirement Inequality, from the National Institute on Retirement Security (NIRS) and the UC Berkeley Labor Center, is a unique look at the race, gender, and class equity impacts of public sector defined benefit pensions in the U.S. Authored by Nari Rhee, PhD., director of the Retirement Security Program at the UC Berkeley Labor Center, the report is supplemented by 51 fact sheets that detail the retirement equity impact of pensions in each U.S. state and the District of Columbia.

Read the report.

Read the fact sheets.

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The report finds:

  • Pensions reduce retiree poverty and near-poverty across race, sex, and educational attainment. The anti-poverty impact of pensions is largest for Black and Latino retirees, as well as for retirees without a four-year college degree.

  • Pension income is distributed relatively evenly among recipients by race, while public pension income is distributed more equally by gender than private pension and 401(k) income. For instance, Black pensioners have virtually the same pension wealth as white pensioners, and women hold just over half of public pension wealth.

  • Pension benefits currently in payment to 23.2 million adults aged 55 and older in the U.S. represent $5.6 trillion in household wealth, boosting middle-class family net worth by 36 percent and narrowing racial and gender wealth gaps among older families.

"As economic inequality has grown across the U.S., so too has retirement inequality," said Dan Doonan, NIRS executive director. "This new report is a clear indicator that pensions play a major role in closing this financial gap and ensuring all Americans – especially Blacks, Latinos, women, and those without a four-year college degree – have a better shot at a secure retirement. Pensions not only reduce economic hardship among retirees, but they also serve as a buffer against growing inequality in U.S. retirement wealth," Doonan said.

The report data indicate that among retirees with pension income, 91 percent lived above 200 percent of the Federal Poverty Level (FPL) from 2018 to 2020. In contrast, only 60 percent of retirees without pension income were above 200 percent FPL. Moreover, retired Black women, Latino men, and Black men were twice as likely to have income above 200 percent FPL if they had a pension. Retired Latinas with pension income were 63 percent more likely to be above this basic income threshold. And those with no college education were 73 percent more likely to be above 200 percent FPL than those without a pension.

"Pensions, including public pensions, are vital assets for workers, families, and communities, especially those that have been historically shut out of wealth-building opportunities. Given the decline of pensions in the private sector, public pensions form a critical bulwark of middle-class retirement security alongside Social Security," said Dr. Rhee.    

The national analysis of the impact of pensions on retirement security in this report relies primarily on the 2019, 2020, and 2021 Survey of Income and Program Participation. The analysis of public sector employment demographics in this report uses the Current Population Survey/Annual Social and Economic Supplement (CPS ASEC), a joint survey of the Census Bureau and the U.S. Bureau of Labor Statistics. The state fact sheets associated with this study rely exclusively on CPS ASEC, which has data on pension income but not assets.

The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at

The UC Berkeley Center for Labor Research and Education (Labor Center) produces research, trainings, and curricula that deepen understanding of employment conditions and develop diverse new generations of leaders. More information is available at

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SOURCE National Institute on Retirement Security

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