• According to the National Retirement Risk Index (NRRI), over half of today’s working families are not saving enough to maintain their pre-retirement standard of living. The NRRI is based upon target replacement rates which assume a household’s goal is to accumulate enough wealth pre-retirement to maintain the same standard of living during retirement. Because lower-income families spend a higher portion of their income on basic needs, target replacement rates vary depending on the income group.

  • The Social Security Administration's 2014 Trustees Report found little change from the previous year. While Social Security’s 75-year deficit rose slightly from 2.72 percent of payroll to 2.88 percent, the overall date of the trust fund’s exhaustion is still 2033 and the deficit is still 1 percent of GDP. After the trust fund runs out in 2033, payroll taxes would be sufficient to cover around three-quarters of benefits, assuming tax rates and benefit formulas remain constant.

  • Some state and local governments issued pension obligation bonds (POBs) to pay their required pension contributions. POBs are debt securities used to pay unfunded accrued actuarial liabilities in a public pension planSince 1986, state and local governments have issued around $105 billion in pension obligation bonds. The bulk of POB activity has centered in 10 states, including Illinois and California.

  • While there are only a few winners and a much larger pool of losers under current pension systems, a smooth accrual model would allow more teachers to gain secure, retirement benefits from the onset of their careers.
  • Providing Social Security for all public workers would resolve equity issues and gaps in coverage while representing a modest increase in costs for state employers.