The Public Retirement Research Lab A joint initiative of EBRI and NAGDCA Tenure by public-sector worker class and region reveals specific patterns. Federal workers’ median tenures across regions were at least as long as those of the other public-sector worker classes. However, in the Midwest and West, federal workers’ median tenures were particularly longer than some of the other public- s ector worker classes. In the Midwest, federal workers’ median tenure was 10 years, compared with 7 years Study Snapshot About PRRL for local workers. Western federal workers, meanwhile, had a median tenure that was 3 years longer than June 18, 2020 their state counterparts (8 and 5 years, respectively). The Public Retirement Research Lab is a retirement-industry-sponsored collaborative In general, Western workers, regardless of public-sector worker class, tended to have the shortest median effort of the Employee Benefit Research Institute (EBRI) and the National Association tenures, while Northeastern workers tended to have the longest tenures regardless of public-sector worker of Government Defined Contribution Administrators (NAGDCA). The PRRL mines data Meaningful Differences in Public Employee Tenure by class. Namely, in the Northeast in 2018, public-sector workers had median tenures ranging from 7 to 9 from its Public Retirement Research Database, the first-ever database specific to years compared with 5 years for private-sector workers. Geographic Region public-sector defined contribution data, to produce unbiased, actionable research By examining the tenures of public- and private-sector workers, some important conclusions can be drawn. aimed at enhancing understanding of the design and utilization of public-sector A recent PRRL Research Study titled “Trends in Public-Sector Employee Tenure” found — based on data from Federal workers had the longest median tenures or were tied across each of the regions, while private-sector defined contribution retirement plans to better inform public plan design, the U.S. Census Bureau’s Current Population Survey (CPS) — that workers in the public sector have workers had the lowest tenures across all regions. However, the median tenures of state and local workers significantly longer tenures, on average, than those in the private sector. A key conclusion from the Research management, innovation, and legislation. To learn more, visit www.prrl.org did not have a consistent pattern across the regions other than being higher than those of private-sector Study was that, given these differences, as well as differences in defined benefit plan availability, retirement workers. Local workers in the Northeast and West had higher tenures than state workers in those regions, programs in the private sector are not likely models for the public sector. but in the South and Midwest, the tenure levels were equal in 2018. The study further found that, by segmenting tenure levels across each level of government (federal, state, The long tenures of local workers in the Northeast and West could change significantly from the impact of and local) and region (Northeast, Midwest, South, and West), it is possible to show the different challenges We would like to thank the following Partners of the PRRL. COVID-19, as these regions were hit particularly hard by the virus. Many governments in these regions have various parts of the government face in providing retirement benefits and managing the work force as Baby announced significant layoffs, with more likely coming from the tremendous loss in budget revenues. Boomers retire and Millennials become the largest share of the labor force. Retirement decisions could also be accelerated due to older workers being concerned with their safety in continuing or returning to work. T he median tenure of all public-sector workers in 2018 was 7 years compared with 4 years for private-sector workers. This was true regardless of geographic region; however, state workers had the shortest median Founding Partners: These changes could have important consequences for public-sector retirement programs, as more tenure among the public-sector workers at 6 years, compared with 7 for local workers and 8 for federal participants could become beneficiaries, leading to more payments and withdrawals. Furthermore, the workers. makeup of the work force could change, as more younger workers could be in the ranks of state and local Capital Group / American Funds governments. Invesco Median Tenure by Class of Worker and Geographic Region Nationwide A younger work force was already indicated by the data due to the relative size of the Millennial generation compared with Generation X. But with significant retirements, this would be hastened. Thus, retirement 11 programs are likely going to need to encompass programs that look at the total finances of the workers, as 10 Supporting Partners: 10 these can be more important for the younger workers. This could include various financial wellbeing 9 9 9 programs, such as emergency savings programs, student loan debt programs, and overall budgeting ICMA-RC 8 8 programs. These programs can help establish the overall finances of the younger workers so that they have 8 Prudential their finances in order to prepare for r7 etiremen 7 t i 7nstead of struggl 7 ing t 7o meet c 7 urrent financial obligations, 7 Voya particula Finan rly aftc er ia tlh e impact of COVID-19. 6 5 5 5 5 Contributing Partners: 4 4 4 3 Ben Taylor, Callan — PRRL Co-Chair 2 Wendy Carter, Segal — PRRL Co-Chair Brenda Ande 1 rson, Nationwide — PRRL Vice Chair Keith Overly — PRRL Plan Sponsor Advisory Council 0 Federal State Local Private Sector Note: Years of tenure at current job for wage and salary workers ages 20 or older as of 2018. Source: EBRI estimates from the January 2018 Current Population Survey. Tr Tr Tre ends en nds ds i i in n n P P Pu u ubl bl bli i ic c c- - -Sec Sec Sector tor tor Em Em Empl pl ploye oye oyee Ten e Ten e Tenu u ur r re e e P P PRRL Res RRL Res RRL Resear ear earch Stu ch Stu ch Study dy dy No. No. No. 1 1 1 — — — M M May 7, ay 7, ay 7, 2 2 202 02 020 0 0 © © © 20 20 2020 20 20 P P PRRL RRL RRL Years of Tenure Northeast Midwest South West Northeast Midwest South West Northeast Midwest South West Northeast Midwest South West