MSPB Identifies Retirement as a Retention Tool for the Federal Workforce
In the January 2022 edition of the Merit Systems Protection Board's (MSPB) Issues of Merit, the body recognized research suggesting retirement benefits are a significant retention tool and contribute to federal employees' staying power.
The MSPB cites the most recent Federal Employee Benefits Survey, from which the Office of Personnel Management (OPM) reported nearly 70 percent of respondents indicated that the Federal Employees’ Retirement System (FERS) annuities significantly influenced their decision to remain with the government. Another 20 percent reported FERS had a moderate influence on their decision. Another popular benefit was the Thrift Saving Plan (TSP), with 82 percent reporting it strongly or moderately affected their decision to remain in government. From this data, the MSPB further found that FERS and TSP had a greater impact on respondents' intention to remain in the federal workforce more than they influenced their initial recruitment.
According to the MSPB, the key to making the retirement plan an effective retention tool is educating employees about where they can access personalized information. Doing so will cost agencies little and put the benefits of a public service career at the forefront of employees' minds. By providing employees with information about federal benefits, agencies can demonstrate how valuable employees are, as well as show that a higher salary or bonus at a non-federal job does not necessarily mean that it is better for the employee holistically. Furthermore, free webinars from the TSP can help employees make better-informed career plans and remind employees of the benefits federal employment can offer beyond the satisfaction that comes with a career in government service.
Similarly, the latest MetLife Employee Benefit Trends Study probed organizations of all sizes and found retirement benefits are a key component to employee loyalty. The study noted, "Four in 10 employees say retiree benefits are a key reason to stay with their employer. Interestingly, this is particularly true among millennials, who feel the most strongly about this compared to their generational counterparts."
Amy Carr, Executive Vice President of Human Resources for a San Diego-based marketing firm, has noticed a spike in interest in retirement benefits during recruiting.
"What I've found is, in recruiting, retirement benefits are an issue, because, from my perspective, they're evaluating the whole compensation package," Carr stated, "If there is a strong matching program that the employer is funding, a program that's tied to tenure and promoted with the employees, I think that's a compelling tool."
Although some federal employees may be more aware of their benefits package than others, the MSPB highlighted that increasing this knowledge overall can assist the federal government in retaining talent in the current, competitive market.
