Decisions, Decisions: An Update on Retirement Plan Choices for Public Employees and Employers
Public employees with retirement plan choice overwhelmingly choose defined benefit pension plans over defined contribution 401(k)-type individual accounts.
Among the eight states studied that offer employees such a choice, the DB pension take-up rates in 2015 were 80 percent or higher in six states. Two of the plans studied had pension take-up rates higher than 95 percent, while Florida and Michigan had take-up rates of 76 percent and 75 percent, respectively. Importantly, the research finds that even when the retirement plan default option favors a DC plan, most employees still select a DB pension plan.
For example, in Washington the default retirement plan is a combination DB/DC plan. Employees must affirmatively act to elect to participate in the DB pension plan instead, and they do. The majority of newly-hired employees – six out of every ten new hires – actively choose a pension plan.
The research is co-authored by Jennifer Brown, manager of research for the National Institute on Retirement Security (NIRS) and Matt Larrabee, principal and consulting actuary with Milliman.
Florida’s Property Tax Initiative and the Unexpected Connection to Retirement Security
Property-tax relief could help homeowners facing rising costs—but what could it mean for the services they rely on and the retirement benefits of the public employees who provide them?
Recorded before a live audience at the Florida Public Pension Trustees Association conference, this Special Edition of Retirement in America examines Florida’s proposed property-tax changes, known as Amendment 3. The conversation looks beyond next year’s tax bill to consider how reduced revenues could affect staffing, emergency response, infrastructure, local control and public pension funding over time.
Watch this Special Edition Episode, Florida’s Property Tax Initiative and the Unexpected Connection to Retirement Security, below.
Workforce Turnover and Retention in the Public Sector: Insights from Public Pension Plans
This report examines how retention changes over public employees’ careers and varies across public workforces and retirement systems. The analysis draws on actuarial turnover assumptions and other information collected from 136 state-administered public pension plans representing 203 plan-employee groups and 12.8 million active members.
