State and Local Retirement Plans in the United States

State and Local Retirement Plans in the United States

Robert L. Clark, Lee A. Craig and John Sabelhaus

State and Local Retirement Plans in the United States explains how economic and political events have shaped the development of pension plans in the last century, and it argues that changes in the structure and generosity of these plans will continue to shape policy and funding in the future. It also brings to bear a new rationale to the policies behind public sector pension plans. The authors use the history of how early public pension plans were established, how they matured and how they have grown in generosity to analyse what changes may be expected in years to come. Unique in its scope, this comprehensive history of the development of public sector pension plans in the United States during the twentieth century expands upon current ideas relating to the changing economic environment, the passage and evolution of social security, and the expansion of the public sector.

Chapter 2: Public Sector Pension Plans on the Eve of the Great Depression

Robert L. Clark, Lee A. Craig and John Sabelhaus

Subjects: economics and finance, public sector economics, social policy and sociology, ageing


In 1900 a few large cities maintained pension plans for their teachers, firefighters and/or police officers; however, no state offered a pension plan to any of its employees. Over the next three decades this situation changed, and by the late 1920s, retirement pensions for public sector workers in the United States were much more common, though by no means universal.1 Roughly 45 percent of local, state and federal workers were covered by some type of employer-sponsored retirement plan by 1930.2 This figure compares favorably with the 9.1 percent of private sector workers covered at the time.3 However, the overall public sector figure masks the unevenness of coverage across the country and between various levels of government. Almost all federal employees were covered by a retirement plan; roughly 40 percent of the nation’s public school teachers were covered, but relatively few other state employees, and virtually no county-level employees, were covered. As for municipal workers, almost all police officers and firefighters in the nation’s largest cities had a pension plan, as did police officers and firefighters in many mid-sized cities outside of the South. However, few cities covered their other municipal employees – such as public utilities and street department workers, clerks and so forth. Overall, the share of the public sector labor force covered by a retirement pension had been growing by about one-half of a percentage point per year, dating back to the middle of the nineteenth century, a much more rapid rate of growth than that experienced by the...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information