Pensions Have ‘Critical’ Role in Strengthening Public Safety Workforce

For states and municipalities, offering public safety workers a sufficient defined benefit pension benefit is key to maintaining a healthy public safety workforce, according to new research, with a knock-on effect on both public safety and protecting property.

For states and cities, offering pension plans to police officers and firefighters—particularly—is critical to sustain a robust public safety workforce to fight fires and maintain public safety, according to a National Institute of Retirement Security paper, “The Role of Defined Benefit Pensions in Recruiting and Retaining Public Safety Professionals.”  

“Defined benefit pension plans are an essential component of a public safety career,” explained Tyler Bond, the institute’s research director, during a July 11 webinar on the topic.

Defined benefit pensions support the three Rs of workforce management: recruitment, retention and retirement, according to the paper presented during the webinar. More than half (52%) of new hires in public safety positions are expected to retire as a participant in the pension plan, with an average of 17.6 years of service, NIRS found.

While 6% will leave their job due to disability or death, “only 42% are expected to leave for another reason, likely quitting,” the paper stated. This contrasts with experience “in the private sector, where the median tenure in 2022 was 4.1 years,” according to data from the Bureau of Labor Statistics published in 2022.

Public safety workers tend to join these pension plans at about ages 27 or 28, and the average length of service for current, active employees was 12 years, according to the research paper.

This length of service at one organization is “unheard of, really,” compared with the lengths of service of workers in all public pension plans or larger state pension plans, explained Paul Baugher, a senior consultant with Foster & Foster, co-author of the paper and a webinar presenter.  

Bond added that “pensions have demonstrated impacts on helping to recruit police officers and firefighters, keep them throughout their career and then help them to transition into retirement at the appropriate time.”

For firefighters and police offices, offering DB plans is even more critical because many will not be eligible to receive Social Security benefits when they retire. As many as two-thirds of firefighters and police officers do not participate in Social Security through their public safety job, NIRS estimated.

In the U.S., there are approximately 700,000 full-time police officers with the power of arrest, according to 2023 figures from the Bureau of Labor Statistics, and if figures include other police department employees, the number is more than 900,000 full-time employees, according to FBI data from 2019.

Full-time professional fire fighters number approximately 315,000 workers nationally, found BLS, in 2023.

Providing a DB plan is also a recruitment tool for states and cities, facilitating hiring for public safety professions. The NIRS research examined a nationally representative sample of 28 police and firefighter pension plans and found that three-quarters of these plans expect at least 75% of their current employees to retire from the plan. These plans accounted for more than 250,000 retirement plan participants in 2022.

The NIRS research also found that, in 2019, half of police officers and more than half of firefighters said the ability to earn a pension benefit was a reason they chose a public sector job. More than 60% of both groups of workers said the pension was a major reason they stayed at their job.

Meanwhile, 86% of state and local government employees cited retirement benefits as either major or minor factors that attracted them to their public sector job in the first place, according to 2023 research from MissionSquare Research Institute.  

The paper was co-authored by Baugher; Bond; Alisa Bennett, president and consulting actuary at Cavanaugh Macdonald Consulting; Dan Doonan, executive director of the National Institute on Retirement Security; Larry Langer, principal and consulting actuary at Cavanaugh Macdonald Consulting; Joe Newton, a senior actuary at Gabriel, Roeder, Smith & Co.; Daniel Siblik, vice president and actuary at Segal; and Matthew Strom, a senior vice president and actuary at Segal.