Defined Benefit Pension Plans as a Means of Recruitment and Retention

Date

2022-06

Authors

Hassig, Christopher

Journal Title

Journal ISSN

Volume Title

Publisher

Law Enforcement Management Institute of Texas (LEMIT)

Abstract

Public sector employees have long received lower pay than their private sector counterparts (Rosenberg, 2019). When looking at individuals with advanced degrees, the pay disparity is even greater (CBO, 2017). One way that government entities entice candidates is a defined benefit pension plan. A defined benefit pension plan is a retirement system that uses a formula consisting of service years, average salaries, and a multiplier to compute a steady form of income (Fornia & Rhee, 2014). Defined benefit pension plans should be offered to all law enforcement officers as a means of recruitment and retention. Fornia and Rhee (2014) explained that a well run defined benefit pension plan provides numerous economical benefits in comparison to a defined contribution retirement plan. Officers have shown in multiple studies to give a strong preference to defined benefit pension plans. Schuck and Rabe-Hemp (2017) showed that an agency’s participation in a defined benefit pension plan contributes to lower voluntary turnover, while Capsembelis (2004) discussed a pension and retirement as two of the strongest factors in employment decisions for new and old officers. Detractors believe that defined contribution plans are the way of the future for agencies, as they are portable and more affordable for municipalities to maintain. Opponents look to pensions as a major cause of the bankruptcies in cities nationwide, and the idea that millennials and their penchant to change jobs as another reason to move to defined contribution plans. Again, the studies of Schuck, Rabe-Hemp, and Capsembelis each show that defined benefit pension plans carry significant weight with officers. Defined benefit pension plans prove to be the preferred choice in retirement options for law enforcement.

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Keywords

Police--Recruiting, Retirement, Employee Fringe Benefits

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