Public Worker Boomer Retirement Wave Stalled

May 13, 2009 ( - The slumping economy is holding back retirements among state and local government employees, according to a new survey of government managers, sponsored by the Center for State and Local Government Excellence.

According to a press release, “A Tidal Wave Postponed: The Economy and Public Sector Retirements” finds that almost half (49%) of the respondents to the membership survey said 20% or more of their workers are eligible to retire in the next five years, and 80% said the economy is affecting the timing of retirements.

Of those, 85% said employees are delaying retirements, while only 9% said they are accelerating their retirements to avoid changes that will reduce benefits. Seven percent said employees are taking incentives for early retirement.

Elizabeth Kellar, executive director of the Center for State and Local Government Excellence pointed out that, “Governments have a lot of older workers who work in specialized fields and are hard to replace. Retaining these individuals a little longer gives us more time to help new employees prepare to fill their shoes.”

More than one-third of public employees are 50 or older, compared to less than a quarter in the private sector, Census data show.

Among those managers surveyed by the Center for State and Local Government Excellence who are seeing retirement delays, a majority (62%) said they have more time for knowledge transfer; 51% have more time for position transition; and 49% have more time to mentor younger workers. However, according to the press release, 38% said they are not able to make changes as quickly as they would like; 36% said they are unable to hire new staff with skills they need; and 21% said they may have to introduce incentives to encourage early retirement.

A majority of respondents (56%) said their governments do not have a formal plan to develop their workforce, while 39% said their government's do. Of those with a plan, 31% have made changes in their plans, while 54% said they have not.

Leslie Scott, director of the National Association of State Personnel Executives (NASPE) contends that while the delayed retirements can be beneficial to governments in the short term, "when the economy rebounds and the retirement-eligible employees do retire, combined with the layoffs that governments are implementing, this could cause a tremendous strain on their ability to deliver services." Scott notes that usually employees with less seniority are affected by layoffs, without consideration that their skill sets may be needed when older workers retire.

Three in five survey respondents (60%) said their state governments are instituting layoffs, with 39% of those saying layoffs are based solely on seniority. About 42% said their local governments are laying off employees, with 43% of those saying layoffs are based solely on seniority.

The full survey can be found here.