Marin Public Pension Series – Brief #3: How public pensions support race and gender equity

Nari Rhee

Press Coverage

The Marin Public Pension Series is a three-part issue brief series intended to provide policymakers and the public with an informed perspective on the value, cost, and broader social implications of defined-benefit (DB) pensions for public employees in Marin County, California. Brief #1 examines the economic value of defined-benefit pensions for public employees, employers, and residents in Marin County. Brief #2 addresses the cost and sustainability of public employee pensions. Brief #3 highlights the role of public defined-benefit pensions in reducing retirement wealth inequality by race, gender, and education compared to 401(k)-style plans.


This brief analyzes the impact of public sector employment and defined-benefit pensions on race and gender equity in retirement income security in Marin County and California, drawing on Census data on employment patterns at the county level and retirement plan coverage, income distribution, and poverty at the state level. We find that public pensions play an outsized role in the retirement security of every racial group, particularly in Black and Latino communities, and that pension income provides a critical buffer against economic hardship in old age for all groups, especially women, Black and Latino Californians, and seniors without college degrees. Detailed findings are as follows:

  1. Public sector employment plays a critical role in the retirement security of all racial groups in Marin County and California as a whole, with particularly large impacts on Black and Latino communities.
  • Public employees in Marin County are more racially diverse than the resident population: 39% of the public sector workforce consists of people of color, compared to 29% of residents.
  • Public sector jobs in California provide significantly higher rates of retirement benefit coverage than private sector jobs for every racial group (74% vs 47% on average).
    • Latino workers experience the largest relative boost from public sector employment: Latino public employees are twice as likely as their private sector counterparts to be included in a workplace retirement plan (68% vs 34%).
    • Black public employees are 63% more likely to participate in a workplace retirement plan than Black private sector employees (72% vs 44%).
  • Public sector retirement benefits play an outsized role in the retirement security of every racial group, with the largest relative impact on Black and Latino workers.
    • While only 16% of the statewide workforce is employed in the public sector, public employees make up 23% of all workers with retirement benefits. In addition, most public employees in California are covered by a traditional pension that provides almost twice the retirement income of 401(k)s for each dollar contributed.
    • Public sector employment provides an important economic anchor for the Black community: public sector jobs make up 23% of Black employment and 33% of total retirement plan coverage among Black workers in California.
    • Even though only 13% of Latino workers are government employees, the public sector accounts for 23% of Latino workers with employer-provided retirement benefits in California.
  1. Pensions support middle-class retirement and reduce poverty among older Californians across race, gender, and educational attainment, with the biggest difference for Black and Latino retirees and seniors who do not have a four-year college degree.
  • In 2018-2020, 2.0 million Californians age 60 and older received pension income totaling $47.0 billion annually from a union, company, or government plan. Nearly 700,000 older Californians received income from public pensions, which provided $25.9 billion, or 55% of total pension benefits.
  • Pension income supports a balanced three-legged stool of middle-class retirement income: median income among pension recipients age 65 and older in California was $46,700 in 2018-2020, divided roughly equally into Social Security, pensions, and private sources.
  • Among California retirees—defined for this analysis as having at least $5,000 in Social Security income and less than $5,000 in earnings—91% of those who received a pension or whose spouse received a pension had incomes above 200% of the federal poverty level (FPL) in 2018-2020. In contrast, 49% of retirees without pension income were below 200% FPL, the threshold for CalFRESH food assistance eligibility.
  • Pension income receipt improves retirement income security across race, gender, and education divides.
    • Retirees of color in California were 65% more likely to be above 200% FPL if they had pension income, compared to those without pension income (89% vs 54%). Nationally, Black and Latino retirees with pension income were twice as likely to have incomes above 200% FPL if they have a pension.
    • Both retired men and retired women with pension income were approximately 50% more likely to be above 200% FPL compared to those without pension income (93% vs 62% and 89% vs 54%, respectively).
    • Among retirees with a high school degree or GED, those with pension income were 51% more likely to be above 200% FPL than those without a pension (85% vs 57%).
  1. Pensions are distributed more equitably than 401(k)s and IRAs among older Californians. Pensions also exert a leveling effect on income distribution by race and gender among pension recipients.
  • Among Californians age 65 and older in 2018-2020, pension benefits were distributed less equally by race than Social Security—which is explicitly progressive in benefit structure—but more equally than 401(k)/IRA income.
    • Among individuals age 65 and older, white men, Black men, and white women are most likely to receive pension income (34%, 32%, and 27%, respectively).
    • While Latino seniors were least likely to receive a pension (16% of men and 14% of women), this income source was much more important than retirement accounts for this community. Only 6% of Latino seniors had income from a 401(k) or IRA, compared to 15% of all California seniors.
  • Defined-benefit pensions reduce income inequality by race and gender among California adults age 65 and older with any pension income. During 2018-2020, for every dollar of white men’s pension income and total income, respectively:
    • White women received 88 cents pension income vs 74 cents total income;
    • Men of color received 89 cents pension income vs 81 cents total income; and
    • Women of color received 74 cents pension income vs 63 cents total income.
  • Federal Reserve studies indicate that the shift from pensions to 401(k)s has contributed to widening wealth inequality because wealth held in 401(k)s and IRAs is significantly more concentrated than pension wealth.

Read the full report.