In the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

, public sector

pension A pension (; ) is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be either a " defined benefit plan", wh ...

s are offered at the federal,

state State most commonly refers to: * State (polity), a centralized political organization that regulates law and society within a territory **Sovereign state, a sovereign polity in international law, commonly referred to as a country **Nation state, a ...

, and

local Local may refer to: Geography and transportation * Local (train), a train serving local traffic demand * Local, Missouri, a community in the United States Arts, entertainment, and media * ''Local'' (comics), a limited series comic book by Bria ...

levels of government. They are available to most, but not all, public sector employees. These employer contributions to these plans typically

vest A waistcoat ( UK and Commonwealth, or ; colloquially called a weskit) or vest ( US and Canada) is a sleeveless upper-body garment. It is usually worn over a dress shirt and necktie and below a coat as a part of most men's formal wear. It ...

after some period of time, e.g. 5 years of service. These plans may be defined-benefit or defined-contribution pension plans, but the former have been most widely used by public agencies in the U.S. throughout the late twentieth century. Some local governments do not offer defined-benefit pensions but may offer a defined contribution plan. In many states, public employee pension plans are known as Public Employee Retirement Systems (PERS). Pension benefits may or may not be changed after an employee is hired, depending on the state and plan, as well as hiring date, years of service, and grandfathering. Retirement age in the public sector is usually lower than in the private sector. Public pension plan managers in the United States take higher risks investing the funds than ones outside the United States or those in the private sector.

History

Public pensions got their start with various promises, informal and legislated, made to veterans of the Revolutionary War and, more extensively, the

Civil War A civil war is a war between organized groups within the same Sovereign state, state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government policies.J ...

. They were expanded greatly, and began to be offered by a number of state and local governments during the early

Progressive Era The Progressive Era (1890s–1920s) was a period in the United States characterized by multiple social and political reform efforts. Reformers during this era, known as progressivism in the United States, Progressives, sought to address iss ...

in the late nineteenth century. Federal civilian pensions were offered under the

Civil Service Retirement System The Civil Service Retirement System (CSRS) is a public pension fund organized in 1920 that has provided retirement, disability, and survivor benefits for most civilian employees in the United States federal government. Upon the creation of a new ...

(CSRS), formed in 1920. CSRS provided retirement, disability and survivor benefits for most civilian employees in the federal government, until the creation of a new federal agency, the

Federal Employees Retirement System The Federal Employees' Retirement System (FERS) is the retirement system for employees within the United States civil service. FERS became effective January 1, 1987, to replace the Civil Service Retirement System (CSRS) and to conform federal r ...

(FERS), in 1987.

Federal

- covers approximately 2.44 million full-time

civilian A civilian is a person who is not a member of an armed force. It is war crime, illegal under the law of armed conflict to target civilians with military attacks, along with numerous other considerations for civilians during times of war. If a civi ...

employees (as of Dec 2005). Retired pay for

U.S. Armed Forces The United States Armed Forces are the military forces of the United States. U.S. federal law names six armed forces: the Army, Marine Corps, Navy, Air Force, Space Force, and the Coast Guard. Since 1949, all of the armed forces, except th ...

retirees is, strictly speaking, not a pension but instead is a form of retainer pay. U.S. military retirees do not vest into a retirement system while they are on active duty; eligibility for non-disability retired pay is solely based upon time in service. Unlike other retirees, U.S. military retirees are subject to involuntary recall to active duty at any time, though the likelihood of such a recall is remote, especially after age 60. In 2008, there were 1,983,467 retired military in the US. There were 856,677 receiving military pensions, the remainder carrying their longevity into federal civil service positions.

State

Each of the 50

US states In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its so ...

has at least one retirement system for its employees. There are 3.68 million full-time and 1.39 million part-time state-level-government civilian employees as of 2002. *

Alaska Alaska ( ) is a non-contiguous U.S. state on the northwest extremity of North America. Part of the Western United States region, it is one of the two non-contiguous U.S. states, alongside Hawaii. Alaska is also considered to be the north ...

- Alaska Retirement System *

Alabama Alabama ( ) is a U.S. state, state in the Southeastern United States, Southeastern and Deep South, Deep Southern regions of the United States. It borders Tennessee to the north, Georgia (U.S. state), Georgia to the east, Florida and the Gu ...

Retirement Systems of Alabama Retirement Systems of Alabama is the administrator of the pension fund for employees of the state of Alabama. It is headquartered in the state capital Montgomery, Alabama. David G. Bronner is the chief executive officer. Under Bronner's leade ...

Arizona Arizona is a U.S. state, state in the Southwestern United States, Southwestern region of the United States, sharing the Four Corners region of the western United States with Colorado, New Mexico, and Utah. It also borders Nevada to the nort ...

- Arizona State Retirement System (ASRS, se
external ASRS homepage
and Public Safety Personnel Retirement System of Arizona (PSPRS, se
external PSPRS homepage
*

Arkansas Arkansas ( ) is a landlocked state in the West South Central region of the Southern United States. It borders Missouri to the north, Tennessee and Mississippi to the east, Louisiana to the south, Texas to the southwest, and Oklahoma ...

- Arkansas currently has six retirement systems which cover most employees at the state and local level: Judicial Retirement, Public Employees Retirement, State Highway Employees Retirement, State Police Retirement, District Judges Retirement, and Teacher Retirement. *

California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...

CalPERS The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.5 million California public employees, retirees, and their families".CalPERSFa ...

(California Public Employees' Retirement System),

CalSTRS The California State Teachers' Retirement System (CalSTRS) provides retirement, disability, and survivor benefits for California's 965,000 prekindergarten through community college educators and their families. CalSTRS was established by law in ...

(California State Teachers' Retirement System) *

Colorado Colorado is a U.S. state, state in the Western United States. It is one of the Mountain states, sharing the Four Corners region with Arizona, New Mexico, and Utah. It is also bordered by Wyoming to the north, Nebraska to the northeast, Kansas ...

- Colorado Public Employees Retirement Association, se
external homepage
*

Connecticut Connecticut ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the south. ...

Connecticut Teachers' Retirement Board Connecticut ( ) is a state in the New England region of the Northeastern United States. It borders Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its capital is Hartford, and ...

Delaware Delaware ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic and South Atlantic states, South Atlantic regions of the United States. It borders Maryland to its south and west, Pennsylvania to its north, New Jersey ...

- Delaware Public Employees Retirement System (DPERS), se
external homepage
*

Florida Florida ( ; ) is a U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders the Gulf of Mexico to the west, Alabama to the northwest, Georgia (U.S. state), Georgia to the north, the Atlantic ...

- State Board of Administration of Florida (SBA), se
external SBA homepage
*

Georgia Georgia most commonly refers to: * Georgia (country), a country in the South Caucasus * Georgia (U.S. state), a state in the southeastern United States Georgia may also refer to: People and fictional characters * Georgia (name), a list of pe ...

- Employees' Retirement System of Georgia (ERSGA, se
external homepage
and Teachers Retirement System (TRS, se
external homepage
. *

Hawaii Hawaii ( ; ) is an island U.S. state, state of the United States, in the Pacific Ocean about southwest of the U.S. mainland. One of the two Non-contiguous United States, non-contiguous U.S. states (along with Alaska), it is the only sta ...

- State of Hawaii Employees' Retirement System (ERS), se

*

Idaho Idaho ( ) is a landlocked U.S. state, state in the Pacific Northwest and Mountain states, Mountain West subregions of the Western United States. It borders Montana and Wyoming to the east, Nevada and Utah to the south, and Washington (state), ...

- Public Employee Retirement System of Idaho (PERSI), se

*

Iowa Iowa ( ) is a U.S. state, state in the upper Midwestern United States, Midwestern region of the United States. It borders the Mississippi River to the east and the Missouri River and Big Sioux River to the west; Wisconsin to the northeast, Ill ...

- Iowa Public Employees Retirement System (IPERS), se
external IPERS homepage
*

Illinois Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. It borders on Lake Michigan to its northeast, the Mississippi River to its west, and the Wabash River, Wabash and Ohio River, Ohio rivers to its ...

- State Employees’ Retirement System (SERS) *

Indiana Indiana ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Michigan to the northwest, Michigan to the north and northeast, Ohio to the east, the Ohio River and Kentucky to the s ...

Indiana Public Retirement System Indiana Public Retirement System (INPRS) is a U.S.-based pension fund responsible for the pension assets for public employees in the state of Indiana Indiana ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of th ...

(INPRS), *

Kansas Kansas ( ) is a landlocked U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Nebraska to the north; Missouri to the east; Oklahoma to the south; and Colorado to the west. Kansas is named a ...

Kansas Public Employees Retirement System Kansas ( ) is a landlocked state in the Midwestern region of the United States. It borders Nebraska to the north; Missouri to the east; Oklahoma to the south; and Colorado to the west. Kansas is named after the Kansas River, in turn named a ...

(KPERS) *

Louisiana Louisiana ( ; ; ) is a state in the Deep South and South Central regions of the United States. It borders Texas to the west, Arkansas to the north, and Mississippi to the east. Of the 50 U.S. states, it ranks 31st in area and 25 ...

Louisiana State Employees' Retirement System Louisiana ( ; ; ) is a state in the Deep South and South Central regions of the United States. It borders Texas to the west, Arkansas to the north, and Mississippi to the east. Of the 50 U.S. states, it ranks 31st in area and 25th i ...

(LASERS), se
external LASERS homepage
*

Kentucky Kentucky (, ), officially the Commonwealth of Kentucky, is a landlocked U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders Illinois, Indiana, and Ohio to the north, West Virginia to the ...

- Kentucky Public Pensions Authority (KPPA), se
external KPPA homepage
*

Maine Maine ( ) is a U.S. state, state in the New England region of the United States, and the northeasternmost state in the Contiguous United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Provinces and ...

- Maine Public Employees Retirement System (MainePERS) *

Massachusetts Massachusetts ( ; ), officially the Commonwealth of Massachusetts, is a U.S. state, state in the New England region of the Northeastern United States. It borders the Atlantic Ocean and the Gulf of Maine to its east, Connecticut and Rhode ...

Massachusetts State Board of Retirement (Massachusetts Pension Reserves Investment Trust) *

Maryland Maryland ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic region of the United States. It borders the states of Virginia to its south, West Virginia to its west, Pennsylvania to its north, and Delaware to its east ...

- Maryland State Retirement and Pension System (SRPS) *

Michigan Michigan ( ) is a peninsular U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest, Upper Midwestern United States. It shares water and land boundaries with Minnesota to the northwest, Wisconsin to the west, ...

- Michigan Office of Retirement Services, se
external homepage
*

Minnesota Minnesota ( ) is a U.S. state, state in the Upper Midwestern region of the United States. It is bordered by the Canadian provinces of Manitoba and Ontario to the north and east and by the U.S. states of Wisconsin to the east, Iowa to the so ...

- Public Employees Retirement Association of Minnesota, se
external PERA homepage
*

Mississippi Mississippi ( ) is a U.S. state, state in the Southeastern United States, Southeastern and Deep South regions of the United States. It borders Tennessee to the north, Alabama to the east, the Gulf of Mexico to the south, Louisiana to the s ...

PERS Pers may refer to: * Pers, Cantal, France, a commune near Aurillac * Pers, Deux-Sèvres, France, a former commune near Poitiers * ''Pers.'', taxonomic author abbreviation for mycologist Christiaan Hendrik Persoon *Persian language PERS may refer ...

(Public Employees' Retirement System), which also administers the Mississippi Highway Safety Patrol Retirement System (MHSPRS), Supplemental Legislative Retirement Plan (SLRP), and Municipal Retirement Systems (MRS); se
external homepage
*

Missouri Missouri (''see #Etymology and pronunciation, pronunciation'') is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. Ranking List of U.S. states and territories by area, 21st in land area, it border ...

- Missouri State Employees Retirement System *

Montana Montana ( ) is a landlocked U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Idaho to the west, North Dakota to the east, South Dakota to the southeast, Wyoming to the south, an ...

- Montana Public Employee Retirement Administration, se
external MPERA homepage
*

Nebraska Nebraska ( ) is a landlocked U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders South Dakota to the north; Iowa to the east and Missouri to the southeast, both across the Missouri River; Ka ...

- Nebraska Public Employees Retirement Systems *

Nevada Nevada ( ; ) is a landlocked state in the Western United States. It borders Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. Nevada is the seventh-most extensive, th ...

- Public Employees' Retirement System of Nevada *

New Hampshire New Hampshire ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...

- New Hampshire Retirement System *

New Jersey New Jersey is a U.S. state, state located in both the Mid-Atlantic States, Mid-Atlantic and Northeastern United States, Northeastern regions of the United States. Located at the geographic hub of the urban area, heavily urbanized Northeas ...

- Public Employees’ Retirement System, Teachers’ Pension and Annuity Fund, Police and Firemen's Retirement System, State Police Retirement System, Judicial Retirement System, Alternate Benefit Program, Defined Contribution Retirement Program, se
external NJ Division of Pension and Benefits page
*

New Mexico New Mexico is a state in the Southwestern United States, Southwestern region of the United States. It is one of the Mountain States of the southern Rocky Mountains, sharing the Four Corners region with Utah, Colorado, and Arizona. It also ...

- Public Employees Retirement Association of New Mexico, se
external PERA homepage
*

New York New York most commonly refers to: * New York (state), a state in the northeastern United States * New York City, the most populous city in the United States, located in the state of New York New York may also refer to: Places United Kingdom * ...

- New York State and Local Retirement System, New York State Local Police and Fire Retirement System, New York State Teachers' Retirement System *

North Carolina North Carolina ( ) is a U.S. state, state in the Southeastern United States, Southeastern region of the United States. It is bordered by Virginia to the north, the Atlantic Ocean to the east, South Carolina to the south, Georgia (U.S. stat ...

- North Carolina Retirement Systems (NCRS), se
external North Carolina Department of State Treasurer (NCDST)
*

North Dakota North Dakota ( ) is a U.S. state in the Upper Midwest, named after the indigenous Dakota people, Dakota and Sioux peoples. It is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north and by the U.S. states of Minneso ...

- North Dakota Public Employees Retirement System, se

*

Ohio Ohio ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Erie to the north, Pennsylvania to the east, West Virginia to the southeast, Kentucky to the southwest, Indiana to the ...

- Ohio Public Employees Retirement System *

Oklahoma Oklahoma ( ; Choctaw language, Choctaw: , ) is a landlocked U.S. state, state in the South Central United States, South Central region of the United States. It borders Texas to the south and west, Kansas to the north, Missouri to the northea ...

- Oklahoma Public Employees Retirement System *

Oregon Oregon ( , ) is a U.S. state, state in the Pacific Northwest region of the United States. It is a part of the Western U.S., with the Columbia River delineating much of Oregon's northern boundary with Washington (state), Washington, while t ...

Oregon Public Employees Retirement System The Public Employees Retirement System (PERS) is the retirement and disability fund for public employees in the U.S. state of Oregon established in 1946. Employees of the state, school districts, and local governments are eligible for coverage. ...

Pennsylvania Pennsylvania, officially the Commonwealth of Pennsylvania, is a U.S. state, state spanning the Mid-Atlantic (United States), Mid-Atlantic, Northeastern United States, Northeastern, Appalachian, and Great Lakes region, Great Lakes regions o ...

- State Employees' Retirement System and Public School Employees' Retirement System *

Tennessee Tennessee (, ), officially the State of Tennessee, is a landlocked U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders Kentucky to the north, Virginia to the northeast, North Carolina t ...

- Tennessee State Consolidated Retirement System *

Texas Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...

- Employees Retirement System of Texas (ERS), se
external ERS homepage
and

Teacher Retirement System of Texas Teacher Retirement System of Texas (TRS) is a Pensions, public pension plan of the State of Texas. Established in 1937, TRS provides retirement and related benefits for those employed by the public schools, colleges, and universities supporte ...

(TRS), se

*

Utah Utah is a landlocked state in the Mountain states, Mountain West subregion of the Western United States. It is one of the Four Corners states, sharing a border with Arizona, Colorado, and New Mexico. It also borders Wyoming to the northea ...

- Utah Retirement Systems *

Virginia Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...

- Virginia Retirement System, se
external varetire.org
*

Washington Washington most commonly refers to: * George Washington (1732–1799), the first president of the United States * Washington (state), a state in the Pacific Northwest of the United States * Washington, D.C., the capital of the United States ** A ...

- Washington Department of Retirement Systems, se
external https://www.drs.wa.gov/
*

Wisconsin Wisconsin ( ) is a U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest of the United States. It borders Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michig ...

Wisconsin Dept of Employee Trust Funds Wisconsin ( ) is a U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest of the United States. It borders Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michig ...

Funding

Since 2001, U.S. statewide pension funds have experienced significant funding challenges due to the recessions of 2001-2002 and 2008-2009. Prior to the Dot-Com Crash, statewide pension funds were over 95.6% funded in the aggregate. In 2002, the funded ratio had declined to 82.1%. While funds did mostly recover by 2008, the Great Recession resulted in funded ratios declining to 63.8% in 2009. Over the following decade, funding levels improved over 2009’s all-time low, until the Covid-19 pandemic ushered in an era of unprecedented market volatility. The on-set of the pandemic resulted in funded ratios dropping back down to 71.2% in 2021, followed by a rebound to 84.5% in 2021. In 2022, market corrections resulted in the largest single-year decline since 2009, bringing the aggregate funded ratio to 77.8%. As of July 2022, unfunded liabilities for statewide plans totaled $1.2 trillion. Statewide retirement systems account for the bulk of unfunded liabilities in the US. State Pension plans account for approximately 88% of all unfunded liabilities of non-federal retirement systems. While national aggregates provide insight into larger trends, the funded ratio of state pension plans vary significantly by state. The extent to which unfunded liabilities impact states is relative to their overall economic output. The size of unfunded liabilities relative to the size of a state’s GPD, provides a sense of the scale of resources that are needed to restore retirement systems to full funding. Illinois, Kentucky, New Jersey are significantly burdened by the funding shortfalls facing their retirement systems. Nebraska, Utah, New York and Idaho’s unfunded liabilities are equivalent to less than 1% of their respective GDPs, meaning their pension funds are well-managed and do not significantly tax their economic resources.

Local

Many U.S. cities are allowed to participate in the pension plans of their states; some of the largest have their own pension plans. The total number of local government employees in the United States as of 2020 is 14.3 million. There are 11.1 million full-time and 3.1 million part-time local-government civilian employees as of 2020.

Local Funding

Local plans are slightly better funded than statewide plans in the US. Local plans are 78.2% funded in 2022, compared to 77.8% for statewide plans. However, the historical funding trends of municipally-managed plans are similar, if not identical to statewide plans. Locally-managed public pension plans account for approximately 12% of all unfunded liabilities of non-federal retirement systems.

Benefits

Pension benefits in the U.S. can vary widely. The pension replacement rate, or percentage of a worker's pre-retirement income that the pension replaces, varies significantly across states and benefit tiers within state retirement systems. Whether or not a worker is enrolled in social security can significantly impact how secure a public worker’s retirement is. This varies widely by state and profession. Pension benefits are primarily designed to favor workers who work a full career (typically at least 25 years of service), which account for approximately 24% of state-level public workers. In a study of 335 statewide retirement plans, Equable Institute found that 74.1% of pension plans in the US served this group of workers well. The same study found that workers with tenures of 10-25 years of service were served well by 10.9% of plans. Workers with less than 10 years of service were served well by .5% of plans. In another study, Equable Institute found that the total lifetime value of teacher pension benefits have declined by $100,000 on average (13%) since 2005. A teacher hired for the 2005 school year can expect to earn $768,000 in retirement benefits, where as a teacher hired for the 2023 school year can expect to earn $668,000. {{Expand section, date=June 2008

References

External links

U.S. Census Bureau page for local governmentNational Association of State Retirement AdministratorsPublic employee retirement systemsOverview of Pension CrisesExtensive Information on Federal and Postal Retirement Benefits

State Links

Alaska state retirement systemArkansas Public Employees Retirement SystemArkansas Teacher Retirement SystemArkansas State Highway Employees Retirement SystemArizona State Retirement SystemArizona Public Safety Personnel Retirement SystemCalifornia CalPERSColorado PERAConnecticut retirement systemDelaware Office of PensionsKansas Public Employee Retirement SystemKentucky Public Pensions AuthorityLouisiana State Employees' Retirement SystemMaine Public Employees Retirement SystemNorth Carolina Retirement SystemsOhio Public Employee Retirement SystemTennessee Consolidated Retirement SystemUtah Retirement SystemsWisconsin Dept of Employee Trust Funds
Retirement plans in the United States Public employment