 | This article needs to be updated. (November 2018) |
In the United States, public sector pensions are offered at the federal, state, and local levels of government. They are available to most, but not all, public sector employees. These employer contributions to these plans typically vest after some period of time, e.g. 5 years of service. These plans may be defined-benefit or defined-contribution pension plans, but the former have been most widely used by public agencies in the U.S. throughout the late twentieth century. Some local governments do not offer defined-benefit pensions but may offer a defined contribution plan. In many states, public employee pension plans are known as Public Employee Retirement Systems (PERS).
Pension benefits may or may not be changed after an employee is hired, depending on the state and plan, as well as hiring date, years of service, and grandfathering.
Retirement age in the public sector is usually lower than in the private sector. Public pension plan managers in the United States take higher risks investing the funds than ones outside the United States or those in the private sector.[1]