The Impact of Long Vesting Periods on State and Local Workers
The brief’s key findings are:
- 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.