5.8: State and Local Workers

COVER NEWLY HIRED STATE AND LOCAL WORKERS AFTER 2020.

Other Information:

After 2020, mandate that all newly hired state and local workers be covered under Social Security, and require state and local pension plans to share data with Social Security. Under current law, more than 90 percent of all workers are covered by Social Security, but a small share of states and localities exclude their employees from Social Security and instead maintain separate retirement systems. As states face a double hardship of prolonged fiscal challenges and an aging workforce, relying entirely on this pension model has become riskier for both government sponsors and for program participants, and a potential future bailout risk for the federal government. To mitigate this risk and to plan for an orderly transition to comprehensive Social Security coverage, the Commission proposes to mandate coverage for all state and local workers newly hired after 2020. Full coverage will simplify retirement planning and benefit coordination for workers who spend part of their career working in state and local governments, and will ensure that all workers, regardless of employer, will retire with a secure and predictable benefit check. To improve the coordination of benefits for existing part-career state and local workers, the Commission also recommends requiring state and local pension plans to share data with Social Security.

Stakeholder(s):

• State Workers


• Local Workers

Indicator(s):

Indicator:1

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