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Meeting California’s Retirement Security Challenge

  • Summary

    This edited volume brings together rigorous academic and policy research to outline California workers’ retirement prospects in the context of threats to Social Security, the decline of secure workplace pensions, and the shift to risky individual investment accounts like 401(k)s. In California, less than one–half of private sector workers have access to an employer sponsored retirement plan, and nearly half of all workers are likely to have retirement incomes that place them in or near poverty. There is also marked racial and socioeconomic inequality in life expectancy among California residents that persists at retirement age. Fortunately, state level policies can make it easier for employers and employees to participate in cost–efficient and secure retirement plans for workers who do not have an adequate pension.

  • Individual Chapters

    1. Introduction: The Coming Age of Retirement Insecurity PDF
      Jacob Hacker
    2. California Workers’ Retirement Prospects PDF
      Sylvia A. Allegretto, Nari Rhee, Joelle Saad-Lessler and Lauren Schmitz
    3. Life Expectancy in California’s Diverse Population: Recent Estimates by
      Race/Ethnicity and Neighborhood Social Class
      Christina A. Clarke and Amal Harrati
    4. The Employer Case for Defined Benefit Pensions PDF
      Beth A. Almeida and Christian E. Weller
    5. Designing a More Attractive Annuitization Option: Problems and Solutions PDF
      Anthony Webb
    6. High Performance Pensions for All Californians PDF
      Teresa Ghilarducci

    Author Biographies PDF

  • Press Release

    Californians’ Retirement Prospects Grim, Forecasts New Research

    Berkeley — Nearly half of California workers will retire in or near poverty, shows a new study released by the University of California, Berkeley’s Center for Labor Research and Education, “California Workers’ Retirement Prospects.”

    While retirement security is and will be a problem in the whole of the nation, the situation is worse in California, because California workers have less access to employer retirement plans than workers in the United States as a whole, according to the study authors.

    They found that retired people across the state rely overwhelmingly on Social Security income, a trend that could worsen as future workers retire without employer-sponsored benefits. Two-thirds of retirees in poverty are women, who are significantly more likely than men to be poor.

    The paper, lead-authored by UC Berkeley researchers Sylvia Allegretto and Nari Rhee, is part of a new collection of papers, “Meeting California’s Retirement Security Challenge,” a volume released today (Monday, Oct. 3) by the UC Berkeley Center for Labor Research and Education. With contributions from nationally recognized scholars on the subject, the volume provides new research into the retirement income challenges facing workers in California.

    Some key findings from the paper include:

        Social Security serves overwhelmingly as the retirement income foundation for most California retirees, with employer-sponsored retirement plans far behind as their second income source. Social Security provides 79.1 percent of income for the bottom 25 percent of retirees by income, and 70.3 percent for the middle 50 percent.

    Employer-sponsored pensions provide the next largest source of retirement income, at 15.5 percent, for the middle 50 percent of workers.

    Only 52 percent of California workers work for companies that offer a retirement plan, compared to 58 percent for the United States as a whole. Of those who participate in an employer-sponsored retirement plan in California, 61 percent are in a defined-contribution plan such as a 401(k).

    Using data from the Survey of Income and Program Participation 2008 panel, the researchers projected that 46.7 percent of California workers age 25-64 will have retirement incomes below 200 percent of the federal poverty threshold for individuals (i.e. $22,322/year).

    There is significant variation in the proportion at risk across age groups: A strikingly large proportion of workers age 25–44 (54.9 percent) are at risk for serious economic hardship in retirement.

    “Our research shows how important Social Security is to the middle class,” explained Nari Rhee of the UC Berkeley Center for Labor Research and Education, “and in order for today’s workers to retire in dignity, they also need access to a supplemental plan that can provide secure income in retirement.”

    “Today’s retirees are living in a world that is, in a very real sense, already gone: a world of widespread retirement security created by public and private policies that pooled a substantial amount of risk across workers and generations,” Yale University political scientist Jacob Hacker wrote in the Introduction to the publication.

    Unfortunately, Hacker said, those retirees’ children and grandchildren “are coming of age in a fundamentally different world—one that involves much greater individual risk and responsibility and which promises much more unequal retirement prospects. With limited savings and less secure benefits, younger workers face a new world of retirement (in)security.”

    Sylvia Allegretto, a research economist with UC Berkeley’s Center for Wage and Employment Dynamics, said that “there is greater income inequality among retirees in California than in the U.S. as a whole,” continuing, “This will have significant long-term ramifications for individuals, families, and all levels of government in the decades to come.”


    Nari Rhee: (510) 642-9316 or

    Sylvia Allegretto: (510) 289-9146 or

  • Press Coverage

    A Dimming Dream Of Retirement In California
    KPBS radio news | June 19, 2018

    California Assembly passes bill for private worker retirement plan
    Reuters | August 25, 2016

    The Truth About California’s Pension Slashers
    Huffington Post | November 26, 2013

    How To Create A Financial Bucket List
    San Francisco Chronicle | November 21, 2012

    Herdt: How about a race to the middle?
    Ventura County Star | March 6, 2012

    California Democrats push pension plan for nongovernment workers
    Sacramento Bee | February 24, 2012

    A retirement plan for the forgotten
    Los Angeles Times | February 23, 2012

    Women most vulnerable to poverty in retirement | February 8, 2012

    Fewer employer retirement benefits lead to high retirement insecurity in California
    Healthy | February 7, 2012

    Visualizing California’s retirement problem | February 7, 2012

    UC study says hybrid pensions would hurt lowest-paid workers
    Sacramento Bee | February 3, 2012

    Viewpoints: Raising the retirement age increases inequality
    Sacramento Bee | December 1, 2011

    Social Security — a pillar of retirement income
    Sylvia Allegretto | The Berkeley Blog | October 17, 2011

    California workers to face hardships in retirement
    San Francisco Chronicle | October 9, 2011

    Californians Face Dismal Retirement
    The California Report | October 5, 2011

    Bleak picture on California retirements
    Santa Rosa Press-Democrat | October 5, 2011

    The age of retirement insecurity
    Ventura County Star | October 4, 2011

    UC Berkeley report sees tough times for California retirees
    Sacramento Bee | October 3, 2011

    Report: Private sector workers need guaranteed pensions
    Statesman Journal | October 3, 2011

    Young people more likely to retire in poverty, according to study
    The Daily Californian | October 3, 2011