Government employers spend 5.6 times what private employers spend on retirement. That headline hides the actual finding: on pensions the ratio is more than twenty to one, and on 401(k)-type plans the private sector spends nearly twice as much. These are two different retirement systems, not one system funded at two levels.
What this page is and is not. These are employer costs per hour worked, averaged across all workers in each sector. A large share of the public figure is not the cost of benefits being earned today — it is debt service on promises made decades ago. That distinction gets its own section, because leaving it out is the most common way this comparison is abused.
The real ratio
20.6×
What a state or local government employer spends per hour on defined-benefit pensions, against what a private employer spends. $8.22 versus $0.40.
Source: BLS, Employer Costs for Employee Compensation, March 2026, table 1.
At the kitchen table
Your employer is not underfunding your pension. In all likelihood you do not have one. Only 14 % of private-sector workers can even get access to a defined-benefit plan.
What you have instead is a 401(k), which your employer funds slightly better than a government funds its own — and which carries every risk the pension used to absorb.
In the committee room
The two sectors did not diverge on generosity. They diverged on who carries the investment and longevity risk. Private employers moved it onto the worker; government employers kept it.
Every dollar of that $8.22 is a promise with a legal claim behind it. Every dollar of the private $1.16 is a contribution with no promise attached at all.
Access, before you even reach cost
Source: BLS, Employee Benefits in the United States, March 2025, table 1 and news release. Private-industry retirement access 72 %, participation 53 %; state and local 92 % and 81 % across all workers, 99 % and 88 % among full-time workers.
The honest counterweight
This is the part that has to be said before the ratio is used as an argument. Public employer contributions are the sum of two very different things: the normal cost of benefits being earned right now, and the amortisation of promises made to earlier generations that were never fully funded. The second has grown enormously faster than the first.
Source: Equable Institute, State of Pensions 2025. Equable does not publish a 2025 normal-cost/amortisation split, so the growth figures above are the strongest honest statement available — unfunded-liability payments grew roughly sixteen times faster than normal cost over the period.
At the kitchen table
A large part of what a city spends on pensions is paying for people who retired years ago, not enriching the person at the counter today. The clerk you are talking to may well be on a reduced tier that earlier hires were not.
In the committee room
Quoting $8.22 as the cost of a current public employee overstates it, possibly by a wide margin. The defensible claim is narrower and still damning: the public sector kept a system the private sector abandoned, and is now paying for both the benefit and the shortfall.
Who pays for it
Private-sector workers are on both sides of this ledger. They hold the weaker retirement arrangement, and through state and local taxes — property tax above all — they help fund the stronger one.
Owner-occupied households. Nominal has doubled; in constant 2026 dollars it is up about a quarter. 2020 is missing because the pandemic suspended the survey.
Source: US Census Bureau, American Community Survey 1-year estimates, table B25103, median real estate taxes paid, 2005–2024.
At the kitchen table
Property tax did outrun wages, but modestly: +24 % real since 2005 against +17 % for the average wage. It went from 4.37 % of an average wage to 4.60 %.
Applying the national average, roughly $166 of a $3,211 tax bill goes to public pensions. The grievance is not really the size of that cheque — it is what it buys compared with what you have.
In the committee room
The asymmetry is the point, not the amount. A worker with a 14 % chance of access to any pension is contributing to a system where 99 % of full-time staff have one.
That is a defensible policy choice, but it is a choice, and it has never been put to the people funding it in those terms.