Defined benefit plans may serve as a critical element in attracting and retaining more public-safety employees, according to a new report from the National Institute on Retirement Security issued June 25.
Noting that state and local governments across the nation continue to struggle to fill public safety positions, the report titled "The Role of Defined Benefit Pensions in Recruiting and Retaining Public Safety Professionals,” found that a majority of public employee pension plans expect 75% or more their current workforce to retire from the plan, and more than half (52%) of new hires are projected to stay until retirement.
The analysis also discovered that while police officers have an average tenure of 18 years, firefighters have an average of 20 years, and all public-safety workers combined have an average of 17.6 years of service. This retention rate contrasts dramatically with the private sector where the median tenure in 2022 was only 4.1 years — meaning they don’t stay in the same job for their entire career and are most likely quit to find another position.
The report analyzed data from a sample of 28 police and fire pension plans, as well as national datasets.
Moreover, the report found, after the fifth year of service, public-safety employee turnover flattens out and remains low until a public-safety worker reaches retirement eligibility. This data suggests that pension plans are working as they were intended by retaining workers during their career and helping employees transition to retirement when it is appropriate.
"It's widely known that pension plans are an effective tool for employee recruitment and retention, especially among employers seeking a career model for its workforce," said Tyler Bond, NIRS research director and report co-author, in a news release issued in tandem with the report. "This new research is important because it details precisely how pensions are magnets for public-safety employees who fill critical roles that are increasingly difficult for state and local governments to staff."
Bond also cited the state of Alaska, which closed both of its statewide public pension plans in 2006. "The research also considers the negative public safety workforce implications when employers move away from pensions,” he stated. “(Alaska) is realizing the unfortunate workforce consequences. Municipalities throughout Alaska now struggle to recruit and retain firefighters and police officers and, in some jurisdictions, the issue has reached crisis levels.”
The city of Fairbanks, Alaska, Bond noted, does not have any police officers on duty between 8 a.m. and noon due to severe staff shortages, “and the Alaska Department of Public Safety specifically cited the lack of a pension plan as an impediment to success.”
The report also found that public-safety pension plans are largely similar to all state and local government pension plans in terms of funded status, demographic ratio, and assumed rate of return on investments. The main differences are related to benefit provisions related to retirement eligibility.
In addition, the report said many firefighters and police officers do not participate in Social Security through their public-safety job, and the majority of non-covered public-safety professionals are concentrated in several states.
NIRS is a nonprofit, nonpartisan organization established to contribute to informed policymaking by fostering an understanding of the value of retirement security to employees, employers and the economy as a whole, the news release said.
