The impact of long vesting periods on state and local workers

Abstract

The brief's key findings are: (1) Public sector defined benefit plans provide short-tenure workers with little or no pension benefits. (2) One reason is that these plans have long vesting periods - the years of service needed to qualify for any benefit. (3) The longer the vesting period, the less likely an employee will remain long enough to vest. (4) This effect helps explain why nearly half of workers depart without any promise of future benefits.