Nine out of ten Americans are concerned about the nation’s retirement system, according to a report recently issued by the National Institute on Retirement Security (NIRS). The study, entitled, “Pensions and Retirement Security 2011: A Roadmap for Policymakers,” revealed that the majority of Americans are anxious about their retirement, particularly in light of recent economic conditions.
Employees in both the public and private sectors share this concern, according to Ilana Boivie, Director of Programs and co-author of the study. Our recent opinion research, however, shows that nearly 80% of Americans believe all Americans should have access to pensions to have as secure retirement, she says.
With the stream of recent news headlines, there has been growing skepticism and often criticism when it comes to state and local government employee pension systems, particularly among people who work in the private sector.
“Unfortunately, much misinformation exists relative to public pensions, which could fuel any negative sentiment from the private sector,” says Boivie. Extreme examples have led many citizens to believe that all government workers collect huge pension payments upon retirement, when in fact, according to the NIRS, the average pension benefit is only about $24,000.
And, as Boivie explains, “these benefits are funded largely from public employee contributions (unlike private sector pensions) and investment returns. Moreover, many public employees do not participate in Social Security, which makes their pension all the more important.”
How do public employee benefits compare to those in the private sector? The NIRS “Out of Balance” report, published in April 2010 shows that benefits do tend to make up a larger share of total compensation for public sector workers than in the private sector, says Boivie.
“However, even after accounting for the cost of benefits such as pensions and health care, public sector employees still make less than their private sector counterparts-and have for the last 20 years. The research shows that, on average, total compensation is 6.8% lower for state employees and 7.4% lower for local employees than for comparable private sector employees.”
The National Institute on Retirement Security, a national non-profit public policy organization, released the Pensions and Retirement Security 2011 opinion research report in an effort to inform policy makers and to help guide future policy regarding retirement security.