Nari Rhee, director of the Retirement Security Program at the UC Berkeley Labor Center and the author of the report, said previous studies from Federal Reserve economists showed that the decline of pensions and the rise of 401(k)s has contributed to increasing wealth inequality in the U.S. Rhee said she explored the specific impact of public pensions in her report because of the historical importance of public employment and the benefits that it provides in terms of living wages, health care and pensions to historically marginalized groups.

"Pensions, in general, reduce poverty, and near-poverty across various divides, including race, sex and educational attainment, and importantly, the anti-poverty impact of pensions is greatest for Black and Latino retirees, as well as for retirees without a four-year college degree," Rhee said. "Pension income is also distributed relatively evenly among recipients by race, and public pension income in particular is distributed more equally by gender than either private pension income or formal 401(k) income."

Rhee said that the vast majority of state and local government employees who are retirement plan participants are in a defined benefit pension plan, while the vast majority of private sector plan participants are in a defined contribution plan. The report showed that 70% of state and local government employees in the lowest quarter wage bracket participate in a retirement plan versus 86% of those in the top quarter, while the private sector has a much more severe difference with just 23% of the lowest quarter of earners participating in plans versus 80% of the top quarter.

Rhee said research showed that 91% of retirees with pension income lived at above 200% of the federal poverty level while just 60% of retirees without pension income reached that same level. The differences in financial security between those without pension income and those with pension income is often stark. For instance, retirees with some college education but no bachelor's degree were 47% more likely to be above 200% of the federal poverty line if they had a pension, while retirees with no college education were 73% more likely to be above that 200% threshold if they had a pension. Meanwhile, 85% of Black retirees with pension income live above 200% of the federal poverty level versus just 43% of those without pension income. For Latinos, 86% with pensions are above 200% of the federal poverty level versus 49% without pension income.

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"The anti-poverty impact goes across all races," Rhee said. "It's universal, but it's got a particularly large impact on some of the most marginalized populations."

The report is supplemented by 51 fact sheets focused on the retirement equity impact of pensions in each U.S. state and Washington, D.C. Rhee said the fact sheets are designed to encourage state-level conversations surrounding pensions because "that's where a lot of public policy debates about pensions happen and to expand the terms of debates to include the fact that pensions actually form a significant part of lower-class household wealth, and that it not only benefits the workers and the families of those who receive pensions, but the broader community."