EBRI Finds Most Valued Employee Benefits are Based on Workers’ Ages

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EBRI Finds Most Valued Employee Benefits are Based on Workers’ Ages

On January 26, 2023, the Employee Benefit Research Institute (EBRI) released its report, Fast Facts: Which Benefits Are Valued Most Depends on Age of Workers. The report is based on EBRI’s recently released 2022 Workplace Wellness Survey.

The survey found that workers’ attitudes about employee benefits are primarily determined by the age of the employee. Overall, older workers focused on retirement benefits; middle-aged employees reported being concerned about various aspects of their well-being; and younger workers were concerned about their monthly bills, career advancement and student loan debt assistance.

Other key findings include:

  • In addition to income and compensation, workers ages 50 to 64 were most likely to value quality health care coverage and quality retirement savings benefits as compared with younger workers;
  • Workers ages 35 to 49 highly valued flexibility in work location; and
  • Workers ages 21 to 34 highly valued career advancement opportunities.

The report is available here.

MissionSquare Conducts Survey of New Career Entrants to Public Service

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MissionSquare Conducts Survey of New Career Entrants to Public Service

On January 12, 2023, the the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) released its report, New Career Entrants to Public Service: Lessons for Employers from Fellowship Applicants. As state and local governments continue to work to fill jobs while also facing a surge of employee retirements, the report provides insight on what attracts younger workers to public service careers.

For the survey, the Research Institute partnered with Lead for America (LFA) to evaluate the national service program’s fellowship applicants’ motivation toward public service, as well as their impressions about the application process and career aspirations. Of the local government fellowship applicants that participated in the survey, the majority agreed that meaningful work is their highest priority, followed by workplace culture and compensation. 

Other key findings include:

  • 83% of the survey respondents found that state and local government benefits are competitive as compared with 32% that found compensation to be competitive;
  • 71% expect to serve in an entry-level position for one to two years prior to receiving a promotion;
  • 62% reported that the COVID-19 pandemic has increased their interest in public service employment;
  • The reputation of the employer as a great place to work is rated highly by the respondents, either as very important (42%) or somewhat important (47%);
  • 58% identified paid leave as being very important;
  • Regarding the hiring process, measures relating to transparency and communication were rated as most important, with timeliness of hiring and application complexity ranked as less important considerations.

The report is available here.

NIRS Releases Pensionomics 2023 Report

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NIRS Releases Pensionomics 2023 Report

On January 4, 2023, the National Institute on Retirement Security (NIRS) released its report, Pensionomics 2023: Measuring the Economic Impact of Defined Benefit Pension Expenditures. The biennial study calculates the national economic impacts of U.S pension plans, as well as the impact of state and local plans on a state-by-state basis.  

According to the study, each dollar of benefit paid to retirees supported $2.13 of the total U.S. economic output.  In addition, these pension benefits help to support the economy, as well as jobs where retirees reside since those with monthly pension income continue spending on basic needs even during economic downturns.  

In 2020, U.S. and global economies were severely impacted due to the COVID-19 pandemic. During this time, defined benefit pension income for retirees was critical and helped to stabilize the economy. In contrast, retirees with 401(k) accounts were reluctant to spend their savings during times of severe economic instability.

During the fiscal year ending in 2020, the study reports:  

  • Public and private pension plans provided about $612.6 billion in benefits to about 24.6 million retirees and beneficiaries. Of this amount, $334.8 billion was paid to 11.5 million state and local government retirees and beneficiaries; $90.3 billion was paid to 2.7 million federal government beneficiaries; $187.4 billion was paid to 10.4 million private sector beneficiaries; $47.2 billion was paid to 4.0 million multiemployer beneficiaries; and $140.2 billion was paid to 6.4 million single-employer beneficiaries.
  • These benefits supported more than $1.3 trillion in the total U.S. economic output and provided an estimated $738.5 billion in value added to the national economy.
  • This, in turn, supported approximately 6.8 million American jobs paying more than $422.2 billion in total compensation, as well as $157.7 billion in annual federal, state and local tax revenues. The largest employment impacts were in retail trade, health care and food service industries. 

The study also finds that over the period from 1993 to 2020, government (i.e., taxpayer) contributions to public pension plans averaged 27.0% of the total annual plan receipts, with the remainder coming from investment earnings (61.4%) and employee contributions (11.6%). As a result, the study estimates that every dollar contributed by taxpayers to public pension funds supports an estimated $7.89 in total economic output. 

According to the report, “In supplying a stable source of income to retirees, DB pension plans support the national economy, as well as local economies throughout the country, with jobs, incomes, and tax revenue. Pension benefits play an important role in providing a stable, reliable source of income regardless of economic climate – not just for retired Americans, but also for the local economies in which their retirement checks are spent.”   

The analysis was conducted using data from the U.S. Census Bureau and input-output modeling software (IMPLAN) to assess the economic impact. In addition to providing national estimates of economic activity, the report also estimates the economic impact of public pensions in all 50 states and provides fact sheets for each state.  

The report is available here.

A map with downloadable fact sheets for each state is available here.

SECURE 2.0 Retirement Reform Becomes Law

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SECURE 2.0 Retirement Reform Becomes Law

On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023 (CAA, 2023), which contained the SECURE 2.0 Act of 2022 (SECURE 2.0). SECURE 2.0 is the culmination of a multi-year, bipartisan effort to follow up on the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE 1.0) that was enacted on December 20, 2019.

The key provisions of SECURE 2.0 are intended to expand retirement plan participation, increase retirement savings, encourage plan sponsorship and ease plan administration. SECURE 2.0 contains about 90 separate provisions each with its own effective date. Some of the provisions took effect on January 1, 2023, but most take effect over the next few years.

Recently, Groom Law Group released its publication, Comparison of the SECURE 2.0 Act of 2022 and Present Law. In this publication, Groom provides a section-by-section summary for the Act’s provisions under the current law and new law (as released on December 20, 2022), as well as the applicable effective dates.

The summary is available here.

 

MissionSquare Releases Report on Public Sector Workforce Trends in 2023

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MissionSquare Releases Report on Public Sector Workforce Trends in 2023

Recently, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) released its report, Six Workforce Trends to Watch in 2023. The Institute researched how public sector employers can manage and support their current workforce, as well as attract new talent. 

According to the report, although 2022 has been challenging for state and local governments and other public service organizations, it has helped leaders gain insights on workforce management systems and support while attracting new talent. The report provides various strategies and actions that public service employers can take to be “employers of choice” and help to improve retention and recruitment. Based on their research, the key workforce trends to monitor in 2023 include:

  • Communicate the full value of benefits;
  • Customize recruitment appeals;
  • Maintain retirement plan funding;
  • Restructure the workforce;
  • Take a holistic view; and
  • Prioritize data-driven decision making. 

Regarding retirement plan funding, the report states, “2022 brought significant economic volatility impacting individual finances and worker anxiety. The first mission for plan sponsors is to weather volatility and commit to maintaining actuarially determined contributions. This will help ensure funded levels do not drop, which would place additional pressure on future contributions or on potentially higher-risk investment strategies designed to make up for any shortfalls. Full funding of retirement plans supports the dual goals of long-term fiscal stability and leveraging retirement plans to serve as effective workforce recruitment and retention tools.”

The report is available here.