The Public Retirement Research Lab Percentage of Wage & Salary Workers Ages 20 or Older With 10 or More A joint initiative of EBRI and NAGDCA Years of Tenure at Current Job, by Class of Worker, 2000 –2018 59.3% Study Snapshot 59% 55.2% About PRRL May 21, 2020 52.6% 52.2% 53% 50.5% The Public Retirement Research Lab is a retirement-industry-sponsored collaborative 47.7% Long-Tenure Workers a Much Greater Force in 46.7% 46.4% effort of the Employee Benefit Research Institute (EBRI 45.9% ) and the National Association 45.8% 47% 43.5% of Government Defined Contribution Administrators (NAGDCA). The PRRL mines data Public-Sector Plans 46.9% 42.8% 45.0% 41.6% 41.3% 40.9% from its Public Retirement Research Database, the first-ever database specific to 40.2% 41% Employee tenure is a critically important topic when it comes to designing retirement programs. In an 41.9% public-sector defined contribution data, to produce unbiased, actionable research 40.9% 1 Employee Benefit Research Institute (EBRI) report, data on employee tenure were shown to contradict the 40.2% 40.2% 39.8% 39.7% 39.5% 39.5% aimed at enhancing understanding of the design and utilization of public-sector belief that individuals in past generations held only one job for their entire career (caree 38.2r j %obs). Instead, it 35% revealed that so-called career jobs never actually existed for most workers and still do not today. defined contribution retirement plans to better inform public plan design, management, innovation, and legislation. To learn more, visit www.prrl.org However, workers in the public sector are found to have significantly longer tenures, on average, than those 29% 27.4% 27.2% 27.0% 26.9% 26.9% 2 in the private sector, according to a report by the Public Retirement Research Lab (PRRL). Using the latest 25.2% 24.8% data on employee tenure f 23.9%rom the January 2018 Supplement to the U.S. Census Bureau’s Current 23.6% Population S 23% urvey (CPS) along with prior years of this supplement, the PRRL report compared the tenure of 2000 2004 2006 2008 2010 2012 2014 2016 2018 private-sector workers with those of federal, state, and local workers to understand the relative differences We would like to thank the following Partners of the PRRL. and trends between these worker classes. By segmenting tenure levels across each level of government, it is Federal State Local Private Sector possible to show the different challenges various parts of the government face in providing retirement Source: EBRI estimates from the February 2000 and January 2004 –2018 Current Population Surveys. benefits and managing the work force as Baby Boomers retire and Millennials become the largest share of the labor force. However, the fraction of state and local workers who had 10 or more years of tenure remained 1.5 to 1.6 Founding Partners: times more than that of private-sector workers. Furthermore, the percentage of state and local workers with The median tenure of public-sector workers was significantly higher than that of private-sector workers in 25 or more years of tenure was also 1.5 to 1.6 times that of private-sector workers. State workers’ each year from 2000 –2018. Federal workers were the only group with a sizable decline in median tenure percentage was 8.1 percent in 2018, while 7.6 percent of local workers had this tenure amount in 2018. For during this time, going from 12.0 to 8.0 years. Nonetheless, that remained considerably higher than the Capital Group / American Funds comparison, private-sector workers’ share was 5.2 percent in 2018. median tenure of private-sector workers, which was 4.0 years in 2018. State workers had the shortest Invesco median tenure among the public-sector workers at 6.0 years in 2018, compared with 7.0 for local workers. Nationwide In contrast t All of this sho o federal wor ws that retirkers, the ten ement program ure tre s in nds f the pri or priva vate s te ect -se or ar ctor, sta e not te, and adequlocal worke ate models f rs were or the pu relat blic ive - ly sector retirement programs. This is not just because of the strong continued prevalence of defined benefit flat. (DB) plans in the public sector but also because of the significant differences in tenure between private- and Supporting Partners: public-sector plans. Defined contribution (DC) plans in the public sector could have different appropriate The public sector also had a higher share of workers with long tenure — greater than 10 years — than the pr asset allo ivate sect cati oron str . While the ategies propor given th tione gu of private arante-ed inc sector worker ome coming s with long te from the DB nure ranged b plan, which c etwould mean m een 34 perceor nt e ICMA-RC investment in riskier assets and lesser need for income-generating assets. In addition, because public-sector and 27 percent since 2000, the share of state workers with long tenure hovered around 40 percent, and the workers fraction of are lolcal w ess likely t orkers o change jo with long tenure reach bs, there are ed as fewer oppor high as 47 per tunities fo cen r le t. Th akag e percen e and tage there is of f mo eder re al w orkers Prudential continuous participation. Naturally, COVID-19 could change this. Future PRRL research will explore the with long tenure was consistently the highest over the period and reached as much as 59.3 percent. Voya Financial potential impact of COVID-19 on public-sector workers’ retirement income adequacy. While the share of state and local workers with long tenure remained relatively flat, the share of federal C work ontrib ers wi uting th lon Partn g tenure ers: dec lined significantly over the period. The fraction of local workers with long tenure was 41.6 percent in 2000 and peaked at 46.9 percent in 2016 before declining again to 42.8 percent in 1 Craig Copeland, “Trends in Employee Tenure, 1983–2018,” EBRI Issue Brief, no. 474 (Employee Benefit Research 2018. State workers with long tenure started the period at 39.8 percent and peaked at 41.9 percent in Instit Ben Tayl ute, Feb orr, Callan uary 28, 2019 — ). PRRL C o-Chair 2014 before declining again to 40.2 percent in 2018. In contrast, the share of federal workers with 10 or 2 Wendy Carter, Segal — PRRL Co-Chair Craig Copeland, “Trends in Public-Sector Employee Tenure,” PRRL Research Study, no. 1 (Public Retirement Research more years of tenure showed a fairly consistent downward trend: from 59.3 percent in 2000 to 45.8 percent Lab, May 7, 2020). Brenda A in 2018. Private nderson, -sector worker Nationwi s wede re the only c — PRRL lass Vic of w e Chair orkers t hat saw the proportion with 10 or more years of tenure peak in 2018, reaching 27.4 percent (up from 24.8 percent in 2000). Keith Overly — PRRL Plan Sponsor Advisory Council Tre Tren nds ds in Pu in Public blic- -S Sec ector Employ tor Employee ee Te Ten nu ure re PRRL Res PRRL Resear earch ch Stu Study No. 1 dy No. 1 — — M May ay 7, 7, 20 2020 20 Trends in Public-Sector Employee Tenure PRRL Research Study No. 1 — May 7, 2020 © © 20 2020 20 PRRL PRRL © 2020 PRRL