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160 Years of Public Pensions in the US
Posted On: May 05, 2017

160 Years of Public Pensions in the United States

Public pensions are not a recent creation. In fact, the earliest public pension in the United States was established over 150 years ago for police officers in New York City. We covered the history of public pensions in our recent report, Why Pensions Matter. Below we’ve highlighted some major landmarks in the early history of public pension plans in the United States.

  • The first public pension plan, created in 1857, provided a lump sum payment to New York City police officers injured in the line of duty. In 1866, New York City broadened the coverage to include firefighters. In 1878, the plan was changed to provide a lifetime pension for police officers at age 55 after 21 years of service.
  • Private sector pension plans also began in this same time period. American Express started a pension plan for its employees in 1875.
  • New York City continued to be the birthplace of many public pension plans. In 1894, the first pension plan for teachers was established in the borough of Manhattan.
  • During the Progressive Era, states began to create pension plans for their employees. Six states started pension plans for teachers during the 1910s:
    • North Dakota and California in 1913
    • Massachusetts in 1914
    • Connecticut and Pennsylvania in 1917
    • New Jersey in 1919
  • In 1911, Massachusetts became the first state to offer a pension plan to its general state employees.
  • The federal government also created a pension plan during this time. The Civil Service Retirement Act of 1920 created the federal civil service pension plan. Passage of the act was spurred, in part, by the end of World War I and the need to reduce the number of federal civilian employees (by encouraging them to retire).

The long history of public pension plans in the United States shows that providing a secure retirement for hard-working civil servants is nothing new. Municipal, state, and federal governments have long recognized that police officers, firefighters, teachers, and other public employees should be able to retire with dignity after a career in public service. It remains just as important today to fight for the retirement security of these workers as it was in the 1850s.


 
 
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