Private sector funds Social Security

Most private sector employees – about 55 million nationwide – rely on defined contribution retirement plans, in which they are responsible for managing their money and there is no guaranteed benefit, to supplement Social Security.

Factoids

6.9 percent

Statewide in 2008, 12,933 of the 186,700 retired public employees, including city, town and state workers and teachers, received accidental disability benefits. That’s 6.9 percent.

Workers pay 9% on average

The average state worker pays 9 percent of his or her salary and the state kicks in more than $1 billion per year to pay for about 12 percent of public employee retirement benefits. The remainder is paid for with pension fund returns.

Private sector funds Social Security

Pensions rise $360 per year

Public employee pensions in Massachusetts increase by a maximum of 3 percent on the first $12,000 of a retirement allowance each year. That’s $360 per year.

S. Shore numbers

The average municipal retiree on the South Shore’s annual pension in 2008 was between $19,000 and $21,500. The average accidental disability retiree on the South Shore’s annual pension in 2009 was about $31,500.

Private sector numbers

Private sector employees contribute 6.2 percent of their gross pay to Social Security and their employers contribute another 6.2 percent. Self-employed workers contribute 12.4 percent.

$13,500 on Social Security

The average annual benefit to people collecting disability through Social Security was about $13,500 in 2008.

Social Security disabilities

Social Security paid disability benefits to more than 9 million people in 2008, about 90 percent of them were considered disabled workers. Mental disorders was the diagnosis for about a third of the people considered unable to work.

319 teachers

As of May, 319 of the 52,508 retired teachers statewide were on accidental disability, or 0.6 percent.

Social Security differs in Mass.

Massachusetts is one of the 15 states in which public employees don’t pay into Social Security and don’t collect it. People who contributed to Social Security while working in the private sector then went into the public sector, lose as much as 55 percent of their Social Security benefit if they are also collecting a public pension.