Has COVID Affected Pensions for Workers without Social Security?

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The brief’s key findings are:

  • At the outset of the pandemic recession, many feared it would undermine workers’ employer-sponsored retirement plans.
  • State and local employees who are not covered by Social Security would have been particularly vulnerable, as they lack the buffer this program offers.
  • Their employer defined benefit plans would have been hurt by a long recession with poor investment returns and reduced contributions due to tax shortfalls.
  • Instead, these plans exceeded their return targets; tax revenues held up; and government sponsors got stimulus aid, so plan funded ratios actually improved.
  • And long-term structural headwinds such as negative cash flows and aggressive return targets still pose little risk to their ability to pay future benefits.