Millennial public employees recognize that pensions are an important aspect of their retirement security. According to a report from NIRS, 71% of them say they would be more likely to leave their jobs if their pensions were cut. Ninety-two percent of millennial public employees also stated that pensions were an effective way to recruit and retain qualified public employees, making them a critical asset for state and local governments to ensure they have low rates of turnover.
Too often, policymakers cite more frequent job changes amongst the younger workforce as a reason to eliminate pensions. This thinking is misguided, failing to take into account the economic reality of millennial workers.
For many members of the millennial generation, the most pressing financial question at the forefront of their minds usually isn’t how they can prepare for retirement. Instead, they often have to ask themselves, “How can I balance my bills by the end of the week?”
Millennials, defined as those born between 1981 and 1996, have experienced multiple economic disruptions throughout their working lives which threaten their ability to keep up with the cost of living (let alone save for retirement).
These events include the Great Recession of 2008, which struck just as a significant share of the generation entered the workforce. The recession left widespread unemployment and stagnant wages in its wake that was more pronounced among millennials. And the past year’s coronavirus pandemic-induced economic downturn also disproportionately impacted this cohort, as one survey shows they were more likely to be financially impacted by the crisis than other generations.
Because of those factors and increasing amounts of student loan debt, it is challenging for millennials to not only afford their needs for today but also prepare for a secure retirement in their future. The National Institute on Retirement Security (NIRS) has found that two-thirds of working millennials have nothing saved for retirement.
One bright spot does exist for millennials who serve in state and local government: they are likely to earn a defined-benefit pension. Pensions, which include guaranteed retirement benefits based on a clear and transparent formula, provide the financial security retirees need to meet the cost of everyday expenses.
While the millennial generation certainly has had a few significant obstacles thrown at them to prepare for retirement, they still want access to pensions in order to retire with dignity and security.