Findings from a newly published survey of trends in the public sector show that state and local governments are experiencing a surge in employee retirements, and as a result are challenged with having to hire a replacement workforce. According to the survey from the Center for State and Local Government Excellence, the percentage of governments hiring increased to 77 percent this year—a huge jump from 27 percent in 2013.
With the uptick in public employee hiring, and as many state and municipal governments face significant retirement debt challenges, the time couldn’t be riper for policymakers to implement much-needed pension reforms. It’s a culmination of events—a perfect storm—that would allow governments to place new employees on a path to secure retirement.
For every new employee a state or municipality hires, it makes a likely 60-year pension commitment in which it more than likely doesn’t have the funding to guarantee. Built on risky investments and holdings, these unsustainable retirement systems have thrown the U.S. into a $4 trillion public pension debt crisis, leaving many public employees wondering what their retirement futures hold.
While current policymakers may not have created the mess in which we find ourselves, they can begin to tidy it up by implementing sound and sustainable pension reforms. This is especially important as workers contemplate going into the public versus private sector. According to the survey, hiring and retaining qualified public employees is the top priority for state and local governments, yet it remains a significant challenge. In fact, positions such as accountants, engineers, information technology experts and nurses remain extremely hard for governments to fill. So as professionals are given the choice of private versus public work, governments need to be able to offer predictable, competitive compensation packages to get the best recruits for the job.
Going forward, state and local governments have a real opportunity to fix their respective pension systems, which will not only help them get the most qualified workers, but will allow them to ensure safe and secure retirement futures for current and future employees.