How Retirement Provisions Affect Tenure of State and Local Workers

Source: Alicia H. Munnell, Jean-Pierre Aubry, Joshua Hurwitz and Laura Quinby, State and Local Pension Plans, SLP#27, December 2012

The brief’s key findings are:
– The “backloaded” benefit structure of public sector defined benefit plans favors long-tenure workers over short-tenure workers.
– However, when a defined benefit plan is combined with either Social Security or a defined contribution plan, the degree of backloading is reduced.
– Not surprisingly, then, the analysis shows that public workers with either Social Security or a defined contribution plan are less likely to stay until retirement age.
– Giving workers more flexibility to switch jobs leads to better employment matches.

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