Developing a Data Module on State and Local Government Pension Payouts to Stimulate Research and Inform Policy
Jean-Pierre Aubry and Kevin Wandrei, Boston College
The presumption is that state and local workers will receive a lifetime pension annuity in retirement from their government employer. This brief confirms this presumption but also reveals that a small share of all state and local workers – about 6 percent – convert a portion of their pension annuity into a lump sum and another 8 percent will potentially enter retirement with un-annuitized DC assets. Among the 6.5 million state and local workers who do not participate in Social Security, roughly 8 percent take a partial lump sum while 1 percent will potentially enter retirement with un-annuitized DC assets. Given that noncovered workers do not earn credit towards a Social Security annuity during their time in government, the few who retire without annuitized income from their state and local government retirement plan may find that they lack steady household income in retirement.