Local Governments Report Changes to Benefits

According to a report released by the ICMA-RC and Center For State & Local Government Excellence, in 2009, 21% of local government human resource executives surveyed reported that their government had made changes to employee retirement benefits since the beginning of the recession; 53% reported having made changes to health care benefits. In 2012, 33% of local government human resource executives reported changes to retirement plans within the past year, and 59% reported making health care changes.   

More specifically, in 2012, 23% of respondents reported that their government increased new employee contributions to pension plans, 14% increased age and service requirements for normal retirement for new hires, and 9% reported that pension benefits were reduced for new hires. For current workers, 23% of those surveyed from local government answered that current employee contributions to pension plans had been increased over the past year, 8% said employer contributions had been increased for current workers, and 3% had reduced/eliminated cost of living adjustments within the past year.   

Among the top three changes to health benefits, 50% of the local government human resource executives reported that their government shifted more health care costs from employer to employees through higher premiums, co-payments and deductibles over the past year. Twenty-seven percent of the respondents’ governments had created wellness programs, and 11% had shifted more costs from employer to retirees within the past year.  

The groups also found that in 2009, 44% of retirement-eligible local workers were delaying retirement and 12% were accelerating their retirement plans. In 2012, retirement delays remained high, with 47% of local respondents reporting that their retirement-eligible colleagues are delaying their retirement. Twenty percent are accelerating their retirement plans.