2014 Retirement Confidence Survey of the State and Local Government Workforce
Retirement plan coverage, specifically by a defined benefit (DB) plan, has traditionally been a defining characteristic of public sector employment. The funding of these plans has been a major policy focus since at least the Great Recession, which resulted in tax revenue decreases and pension fund investment losses.
This joint report by SLGE and the TIAA-CREF Institute analyzes data from a 2014 survey initiative that examined the employment and retirement planning and saving experiences of state and local government employees, as well as their confidence in their retirement prospects. Key findings from the survey of more than 1,200 state and local government employees across the nation include:
- Virtually all full-time state and local workers are covered by some form of retirement plan offered by their employer, but only 39 percent are very confident that they will receive all of the benefits that they have earned in retirement.
- In comparison to 2012, when 72 percent of respondents expected to work for pay after retiring, the figure dropped to 49 percent in 2014.
- While 2014 confidence levels in overall retirement income prospects are generally consistent with 2012 (18 percent are very confident and 56 percent somewhat confident), there was a decrease in the proportion of public sector employees who are either very confident or not at all confident. The 2014 survey also revealed a 7-percentage-point shift of K-12 teachers from very confident to somewhat confident about their retirement income prospects.
- Public sector workers are concerned about federal retirement income security programs. Only 7 percent of state and local government employees are very confident that the Social Security system will continue to provide benefits of at least equal value to the benefits received by retirees today, while 55 percent are not confident. The same goes for Medicare benefits, with 6 percent reporting they are very confident and 52 percent saying they are not confident.
- While 51 percent of retirement savers the public-sector workforce said in 2012 that they received retirement planning advice from a professional financial advisor within the previous three years only 38 percent in 2014 reported receiving advice. But this year’s report suggests more individuals are following all the investment advice they receive. For example, 24 percent reported following all the investment advice received in 2014 vs. 18 percent in 2012.