Public employees play a vital role in communities across the nation. Strong retirement benefits, like pensions, help ensure these employees stay on the job and can retire with financial security after a lifetime of public service.
Across the United States, more than 19 million state and local government employees keep our communities running every day. These workers include teachers educating the next generation, firefighters and police officers ensuring public safety, and countless others who maintain the essential services that citizens rely on. For many of these public employees, a secure retirement is possible because they have access to defined benefit pensions.
Public-service careers often come with demanding responsibilities, lower pay than comparable private-sector jobs, and high levels of accountability. Retirement benefits are important to public workers, and pensions are a proven tool to help governments recruit and retain qualified employees by offering long-term financial security in exchange for a career of public service.
Americans consistently express strong support for pensions for public service professionals. NIRS polling shows that the public values providing retirement security to those who educate, protect, and serve our communities. This support is especially strong because public employees themselves contribute from every paycheck into their pensions, demonstrating shared responsibility.
A common misconception is that public pensions are paid primarily with tax dollars. In reality, the vast majority of pension benefits are funded by two sources: employee contributions and investment returns. On average, about 12 percent of pension financing comes directly from employees, 59 percent from long-term investment earnings, and 29 percent from employer (taxpayer) contributions. This structure makes pensions not only secure, but also highly efficient.
While pay may lag in many instances, the public sector tends to offer strong healthcare and retirement benefits. For example, 86 percent of state and local government employees have access to a defined benefit pension plan as compared to only 15 percent in the private sector. And 89 percent of state and local government employees have healthcare benefits through their workplace.
These benefits help the public sector enjoy much higher retention rates of workers from year to year, compared to private employers. These higher retention rates mean more experienced people providing in public services, including schools, public safety and many other services we rely on daily.
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.
