Defined benefit pension income plays a critical role in reducing the risk of poverty and hardship among older Americans. According to a study released today, rates of poverty among older households lacking pension income were about six times greater than those with such income.
The analysis also finds that pensions reduce – and in some cases eliminate – the greater risk of poverty and public assistance dependence that women and minority populations otherwise would face.
The findings are contained in a new report, “The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships.” The report was authored by Dr. Frank Porell, Professor of Gerontology at the McCormack Graduate School of Policy Studies at the University of Massachusetts-Boston, and Beth Almeida, Executive Director at the National Institute on Retirement Security.
“This analysis reveals that pensions have a unique, independent, and positive impact on older Americans economic well-being. This ‘pension factor’ is particularly powerful for improving the economic security of vulnerable older households - women and members of racial/ethnic minority groups, ” said Beth Almeida, executive director of the National Institute on Retirement Security.”