New Research: Pensions Support a Stable, Experienced Public-Sector Workforce

Employee Retention Strengthens After Five Years, Helping Employers Control Turnover Costs and Sustain Essential Services

WASHINGTON, Oct. 1, 2026 /PRNewswire/ -- Public pensions help government employers retain experienced career workers, reducing costly turnover and supporting the reliable delivery of essential public services, according to new research from the National Institute on Retirement Security (NIRS).

The new report, Workforce Turnover and Retention in the Public Sector: Insights from Public Pension Plans, finds that while employee departures are concentrated in the first five years of service, retention is strong among workers who remain beyond that point. Among public employees who reach five years of service, 53 percent are expected to remain through year 20 and 45 percent through year 30.

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Authored by NIRS Director of Research Barbara Butrica and Executive Director Dan Doonan, the report examines how retention changes over public employees' careers and varies across public workforces and retirement systems. The analysis draws on turnover assumptions published in actuarial reports for 136 state-administered public pension plans representing 203 plan-employee groups and 12.8 million active members. Because the actuarial studies typically use five years of administrative census data, the assumptions reflect roughly 60 million person-year observations.

"The data show that once public employees move beyond the early-career period, they are significantly more likely to remain for the long term," said Butrica. "Pensions help support that career commitment, enabling public employers to retain experienced workers, reduce turnover costs, and maintain a stable and experienced workforce that communities depend on for education, public safety, and other essential services."

The report finds that police and fire employees have the highest retention, teachers fall in the middle, and general, state, and local employees have the lowest retention. It finds higher retention among employees in hybrid-only and traditional defined benefit-only plans than among several other plan types, reinforcing the value of strong retirement benefits as part of a long-term workforce strategy. Retention also is higher among employees in plans without Social Security coverage. However, the report cautions that these relationships are descriptive and may reflect other differences across plans, employers, and the workers they cover. Retention differs relatively little by vesting period.

The report finds that employers will get 10.5 years of service on average per new hire. Among employees who reach at least five years of service, employers will get 19.9 years of service on average, including the first five years. 

"For public employers and taxpayers, retaining experienced employees means protecting the investments made in recruiting and training workers while sustaining the quality and continuity of essential public services," said Doonan. "This research underscores the importance of pensions as a workforce tool, particularly for retaining career employees who bring deep knowledge and experience to highly specialized public services."

Key Findings

• Retention strengthens after the early-career period. The greatest employee losses occur during the first five years, with 48 percent of new hires expected to remain through year five. Among those who reach that milestone, retention becomes substantially more stable.
• Early-career and later-career retention are distinct workforce challenges. Only about a quarter of all new hires are expected to remain through 20 years. Among employees who reach five years, however, 53 percent are expected to remain through year 20 and 45 percent through year 30.
• Pension plans support a stable public workforce across a range of workers and plan characteristics. Retention is generally higher for police and fire employees and teachers, employees in hybrid-only and defined benefit-only plans, and employees not covered by Social Security. Retention differs relatively little by vesting period.
• Average retention masks substantial variation across plans. Variation is greatest among plans covering police and fire employees and increases with years of service. It is less pronounced among plans covering teachers, state employees, and local employees.
• Retention differences compound over a career. Over a 30-year horizon, new hires are expected to complete 10.5 years of service on average, compared with 19.9 years among workers who reach five years (including the first five years). Among these workers, expected service ranges from 18 years for local employees to 22.9 years for police and fire employees.

The report includes a case study from the Fire & Police Pension Association of Colorado (FPPA). It examines why departments that previously left FPPA's defined benefit plan later chose to return. Of approximately 79 departments that withdrew in the 1980s and 1990s, 48 have since returned, and 11 additional departments have voluntarily affiliated with FPPA. Department leaders report that the lifetime income and other protections provided by the pension are meaningful tools for competing for workers and keeping trained first responders.

The report also offers practical guidance for pension plans seeking to apply the analysis to their own workforces. It recommends distinguishing early-career turnover from later-career retention, using the plan's actual vesting period, and considering the workforce's actual age at hire. These measures can help plans assess the expected service generated by each new hire and the career length of employees who stay long enough to qualify for a benefit.

Methodology

The analysis draws on information collected from state-administered public pension plans and selected information from the Public Plans Data (2001–2025). It relies on turnover assumptions published in actuarial reports, which are based on administrative census data describing the historical experience of pension plan members, to characterize long-run turnover and retention patterns. The sample includes plans covering general employees, state employees, local employees, teachers, and police officers and firefighters. Most results are weighted by active membership. The analysis is descriptive and does not establish that plan design, Social Security coverage, or other observed characteristics cause differences in retention.

The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations and other retirement service providers. More information is available at www.nirsonline.org.

SOURCE National Institute on Retirement Security