Horizons Fall/Winter 2019

INDUSTRY UPDATE PUBLIC SECTOR

Succession & the Aging Workforce in Government by Renita Duncan, CPA T here’s a strong case to be made that public sector is the industry most impacted by the aging workforce in the United States and changes in workforce demographics. Pension Plans In the past, in order to attract talent to the governmental sector, nearly all state and local government employers have offered candidates the opportunity to participate in a defined benefit pension plan as a part of their compensation and benefits offerings.

Changes in the workforce are making two major impacts on state and local governments and quasi-governments. The first is the need to fund pension plan obligations for an aging workforce. The second is the challenge of finding ways to stay competitive in attracting and retaining talent without the typical compensation incentives offered by the private sector.

Defined benefit plans provide income or other benefits to an employee for a period of time or in perpetuity, at or after separation from employment. Governments sponsor more than 5,500 pension plans in the United States. Nearly 21 million members participate in these plans, including active public employees, former public employees who have earned

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