Urban InstituteRetirement Policy Center

Briefs: Older Americans' Economic Security



Viewing 1-5 of 34. Most recent listed first.Next Page >>

When Do State and Local Pension Plans Encourage Workers to Retire? (Research Brief)
Richard W. Johnson, Barbara Butrica, Owen Haaga, Benjamin G. Southgate

Traditional defined benefit pension plans that cover nearly all state and local government employees generally penalize work at older ages. In more than three-fifths of state-administered plans, employees hired at age 25 will receive lower lifetime pension benefits if they continue working after age 57 because retirement-eligible workers cannot receive benefit checks while they remain on the job. This reduction in benefits can create strong retirement incentives, which are hard to justify as the population ages and health gains and declines in physical work enable more older people to work. Well-designed public pension reforms could eliminate these work disincentives.

Posted: April 30, 2014Availability: HTML | PDF

How Long Must State and Local Employees Work to Accumulate Pension Benefits? (Research Brief)
Richard W. Johnson, Barbara Butrica, Owen Haaga, Benjamin G. Southgate

Traditional defined benefit pension plans that cover nearly all state and local government employees generally provide generous retirement benefits to long-tenured public servants but little retirement security to those with shorter tenures. Virtually every plan requires employee contributions. In half of those plans, employees must work at least 20 years before their future benefits are worth more than those contributions. Employees who separate earlier get nothing from their plan. Alternative designs like cash balance plans distribute benefits more equally across the workforce and allow employees who spend less than a full career in public service to accumulate retirement benefits.

Posted: April 30, 2014Availability: HTML | PDF

Do State and Local Pensions Lock In Mid-Career Employees? (Research Brief)
Richard W. Johnson, Barbara Butrica, Owen Haaga, Benjamin G. Southgate

State and local pension plans often allow employees who have completed 25 or 30 years of service to collect benefits regardless of their age, instead of waiting until they reach their plan’s normal retirement age. The lifetime value of their pension surges when they qualify for early benefits. Our analysis shows that on average, half the benefits employees have accumulated by their early 50s or late 40s are earned from a single year of work. These patterns create strong incentives for mid-career workers to remain on the payroll until they realize these windfalls, including those ill-suited for their jobs.

Posted: April 30, 2014Availability: HTML | PDF

Is Household Debt Growing for Older Americans? (Series/Older Americans' Economic Security)
Nadia Karamcheva

An increasing number of Americans are entering old age with outstanding debt, forcing many retirees to devote some income to servicing their debt and leaving them with less to cover daily living expenses. Using Health and Retirement Study (HRS) data, this brief reports that the share of adults ages 65 and older with outstanding debt increased from 30 to 46 percent between 1998 and 2010. The inflation-adjusted median value of debt grew 56 percent over the period and the average ratio of total household debt over total household assets more than doubled.

Posted: January 31, 2013Availability: HTML | PDF

How Pension Reforms Neglect States' Recruitment and Retention Goals (Policy Briefs)
Richard W. Johnson, C. Eugene Steuerle, Caleb Quakenbush

To control rising pension costs, many states are reducing the generosity of the retirement plans they offer their employees, partly by increasing required employee contributions. These reforms, however, ignore the employee recruitment and retention problems created by traditional pension plans. Using New Jersey as a case study, this brief shows how state retirement plans discourage younger workers from joining the state's workforce, lock in middle-aged workers even if a job is not a good fit, and push older workers into retirement. Recent reforms make these plans even less appealing to a modern, mobile workforce.

Posted: July 16, 2012Availability: HTML | PDF

 Next Page >>