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NACo > Research > County Research Connections > Posts > The Young and The Restless- Are Counties Ready for Retirement?
March 01
The Young and The Restless- Are Counties Ready for Retirement?

 

 

Retirement


As U.S. workforce grays, employers across the United States are forced to look at their retirement programs and retirement funding, but also at their recruitment policies.

 

This has been the case for some time for counties. According to the State and Local Government Center for Excellence, 36 percent of local government employees are over 60, compared to only 26 percent of the private sector. Only 14 percent of local government employees are under 30, but 26 percent of the private sector is younger than 30. Public sector employees are generally older, their average age at 44 compared to 39 for a private sector employees. Fortunately for county governments, a recent study conducted by the Conference Board shows that 62 percent of workers between the ages of 45 and 60 plan to delay their retirement in 2012, up from 42 percent in 2010.

 

Counties are facing high benefit payouts as the baby boomers begin to retire and governments are still strapped for cash. A survey conducted by the Center for State and Local Government Excellence (2012) shows 61 percent of governments have made changes to their retirement benefits in the past year, and that the most common reform was increasing the employee contributions to pension plans for both new and existing employees.

 

For many years, public sector benefits have sweetened the deal for government workers to turn down higher wages and salaries offered by the private sector. According to the Bureau of Labor Statistics (2012), wages and salaries of state and local government employees make up 64.7 percent of their total reimbursement compared to 70.3 percent of that of the private sector, while retirement benefits make up 8.9 percent in state and local government jobs compared to only 3.6 percent for the private industry. If county governments begin to reform and make cuts to their retirement plans, they need to compensate with higher wages to attract young talent once the baby boomers retire within the coming years.

 

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Source: U.S. Department of Labor, Bureau of Labor Statistics. (2012).

 

Beyond the pay issue, the public sector is already less attractive to young workers because public sector careers are more linear. Age and experience are better rewarded, making it more difficult for young workers to move up and grow. Young workers enter the workforce ambitious and enthusiastic about making a change in the world, and often seek private sector jobs because they feel the private sector will allow them to grow faster, have direct impact and offer more career opportunities.

 

Counties have to take a closer look at their retirement plans in the same time with examining their hiring policies. To attract qualified young talent to civil service, counties must actively educate and recruit young people entering the workforce about the opportunities for making a direct impact on the community and offer them a real chance to make a change.

 

 

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