How Retirement Provisions Affect Tenure of State and Local Workers

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.