2016 Retirement Confidence Survey of the State and Local Government Workforce

February 2017

As state and local governments focus on pension and retiree healthcare reforms, public sector employees are focusing on “reform” of their personal retirement planning and saving.

Summary

Virtually all full-time state and local government employees are covered by some form of employment-based retirement plan, usually a traditional defined benefit pension. The role of defined contribution (DC) plans in the public sector, however, is increasing. These plans often provide a supplemental savings option, but in some cases they serve as the primary retirement plan or part of a hybrid arrangement. The expansion of DC plans is driven by the long-term fiscal challenges facing most states and localities, leading them to reform their retirement plans with changes in eligibility requirements, benefit levels and sometimes plan type.

Key Insights
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 public sector employees would consider when switching employers.
Two-thirds expect to receive retiree healthcare benefits when they retire; among these, one-quarter reported changes to their benefits over the past two years.
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% are somewhat confident.
Only 20% are very confident that they are saving and investing appropriately for retirement, with approximately 55% somewhat confident in their savings and investing.
Methodology

This report reflects the continuation of a survey conducted in 2012 and 2014—The Retirement Confidence Survey of the State and Local Government Workforce—that examines the characteristics, preferences and experiences of full-time state and local government workers, as well as their retirement planning and saving decisions and confidence in their retirement income prospects. The researchers reached a representative sample of 1,255 full-time state and local government employees by telephone between June 23 and July 7, 2016. The sample consists of 500 K-12 teachers, 125 police officers, 130 firefighters and 500 other occupations. Responses were weighted to represent the aggregate public sector workforce.