Right now, 1.2 million teachers are NOT covered by Social Security

If you think Social Security participation is a right afforded to every working American, you’d be very mistaken.

It’s a little known fact not every worker pays Social Security payroll taxes–and therefore can’t claim any retirement benefits at the end of his career.

Prior to the 1950s, no government workers–federal, state, or local–contributed to Social Security. In fact, during the drafting of the Social Security Act, local and state government employees were intentionally exempted from payroll taxes and excluded from the system. This was because of Congress’ serious concerns about the constitutionality of the federal government taxing the states.

By the 1980s, the Social Security Act was amended to compel federal congressmen to contribute (contrary to what many people think, all members of the U.S. Congress pay Social Security taxes). Decades earlier, another set of amendments permitted state-level governments to opt their employees in, as well.

Most states chose to enroll their workers into Social Security. States opting out of mandatory Social Security enrollment were required to offer their employees a pension plan comparable to Social Security benefits.

To this day, 15 state governments don’t offer all of their workers Social Security:




Rhode Island












In these states, many government workers receive a pension instead of Social Security. This includes approximately 1.2 million K-12 schoolteachers nationwide. As a whole, teachers comprise one of the largest groups uncovered by Social Security.

Although pensions can be a wonderful thing for those who receive them, advocates claim this system has the potential to put many teachers at a severe disadvantage come retirement.

In 10 of the 15 states offering teachers pensions, no teacher is eligible for Social Security. So no earned income credits can be built up during a worker’s time teaching. If a teacher switched professions after a short time, he would have lost all of those working years earning credit toward a bigger Social Security benefit–and his pension earned from his time teaching might be similarly small.

And like Social Security itself, several states are approaching massive pension funding shortfalls. Last month, Kentucky officials met to discuss and pass pension reform legislation to get ahead of what Governor Matt Bevin called a “failing” pension system.

Now the trick is figuring out how to create a secure and adequate retirement plan for teachers without hurting those who have already worked towards their pension for decades.