2016 Retirement Confidence Survey of the State and Local Government Workforce
A defining trait of public sector employment has traditionally been retirement plan coverage — usually by a defined benefit plan. Since the 2001 and later 2007-09 recessions, funding of these plans has been a key issue for many states and localities. Budgetary pressures, evolving workforce demographics and preferences, and longer-term retirement plan cost and benefit trends have led almost all state and many local governments to consider and implement various pension reforms.
Pension reform discussions involve more than just financial concerns, however. They also involve the nature of public sector employment, its employment patterns, and employee characteristics and preferences. This joint report by SLGE and TIAA is the continuation of a survey initiative examining the characteristics, preferences, and employment experiences of full-time state and local government workers; their retirement planning and saving decisions; and their confidence in their retirement income prospects. Key findings include:
- One-third of public sector employees have been with their current employer for less than 10 years, and one-third for 20 years or longer. Approximately two-thirds do not expect to leave their current employer anytime soon;
- Health insurance, retirement benefits, job security, and salary are the most important job elements they would consider in deciding whether to switch employers;
- The vast majority are covered by a primary defined benefit pension plan; almost 20 percent of these workers reported changes to these benefits over the past two years;
- Two-thirds expect to receive retiree health care benefits from an employer when they retire; among these, one-quarter reported changes to their benefits over the past two years;
- The typical state and local employee would like to retire at age 62 but expects to retire at 65;
- Most public servants do not know how much they need to save for a comfortable retirement, nor have they planned and saved specifically for medical expenses in retirement;
- Forty-four percent are very confident that they will receive all of the retirement plan benefits they have earned and 44 percent are somewhat confident. The analogous figures for retiree health care benefits are 30 and 54 percent, respectively. Their confidence in future Social Security and Medicare benefits is lower; and
- About 20 percent are very confident that they are saving and investing appropriately for retirement, with approximately 55 percent somewhat confident in their savings and investing.