This article comes from the Center for Retirement Research at Boston College.
The economic turmoil in the early months of the pandemic – a plunging stock market and soaring unemployment – posed a real threat to state and local government pension funds and the workers who rely on them.
One group was particularly vulnerable: public-sector workers who aren’t covered by Social Security and lack the backstop of the federal government if their employer pension plans get into trouble. The Center for Retirement Research has some good news for these 5 million noncovered workers living in 20 states. Their pension plans got through the first two years of the pandemic unscathed.
In dollar terms, government contributions to these defined benefit pension plans actually increased during COVID. That and a roaring stock market in 2021 significantly improved their financial condition. Of course, this sunny report is clouded by what is happening to the stock market now – it has reversed course and dropped 20 percent this year.