A new NBER working paper examines whether early retirement incentives work more effectively than eligibility milestones at getting employees to retire. (Photo: Shutterstock)
A new working paper from the National Bureau of Economic Research finds that public sector employees offered early retirement eligibility or early retirement buyouts are more likely to retire, without incurring any deficits in retirement wealth levels.
The paper “Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives” looked at the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job.
Defined benefit plans are expensive to close, even if a state or municipality wants to close its plan and switch over to defined contribution plans.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
