Chapter 2: Public Sector Pension Plans on the Eve of the Great Depression
2. Public sector pension plans on the eve of the Great Depression 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,...
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