The Impact of Long Vesting Periods on State and Local Workers

Source: Alicia H. Munnell, Jean-Pierre Aubry, Joshua Hurwitz and Laura Quinby, State and Local Pension Plans, SLP#26, November 2012

From the key findings:
– Public sector defined benefit plans provide short-tenure workers with little or no pension benefits.
– One reason is that these plans have long vesting periods – the years of service needed to qualify for any benefit.
– The longer the vesting period, the less likely an employee will remain long enough to vest.
– This effect helps explain why nearly half of workers depart without any promise of future benefits.

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