Public defined benefit pension plans can play a critical role in delivering adequate retirement income for U.S. retirees, while providing a key buffer against economic hardship for women, the Black, Indigenous and people of colour communities and workers without a college degree, according to a new report by the National Institute on Retirement Security and the UC Berkeley Labor Center.

The report, which analyzed pension data collected by the U.S. Census Bureau between 2019 and 2021, found just a third (35 per cent) of individuals aged 65 and older reported receiving pension benefits. Among these individuals, white men (43 per cent) were most likely to do so, followed by Black men (35 per cent), white women (34 per cent) and Black women (33 per cent). Latino men and women (25 per cent and 18 per cent, respectively) were least likely to receive pension benefits.

“While policy debates about public pensions are often framed exclusively as financial liabilities, public pensions are also a critical form of wealth for workers and retirees,” said the report. “As private pension coverage declines, public retirement benefits form a bulwark of middle-class retirement security, particularly for marginalized communities who have been shut out of other wealth-building opportunities.”

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Among retirees with their own pension income or whose spouse received pension income, the vast majority (91 per cent) reported living above 200 per cent of the U.S. federal poverty level between 2018 and 2020, compared to just 60 per cent of retirees without pension income. Retired white men and women with pension income (38 per cent and 47 per cent, respectively) were more likely to be 200 per cent above the federal poverty level.

Retirees without a bachelor’s degree, with some college education or an associate degree were 47 per cent more likely to be 200 per cent above the federal poverty level if they had pension income, a percentage that increased to 73 per cent among retirees with no college education.

Between 2018 and 2020, 23.2 million Americans aged 55 and older received pension income totalling US$470 billion annually. The typical Black pensioner received about the same annual benefit as a typical white pensioner ($15,180 compared to $15,460).

Public pensions play a larger role in narrowing the gender pension gap, according to the report, which noted 50 per cent of public pension wealth is held by women, compared to 38 per cent of private pension wealth and 39 per cent of 401(k)/IRA assets.

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