Three quarters of state and local government workers were in defined benefit pension plans in 2016

In March 2016, 75 percent of state and local government workers participated in defined benefit pension plans. Of these workers, 57 percent participated in frozen defined benefit plans, or plans that are not open to new employees.

For 98 percent of workers who participated in defined benefit pension plans, employee benefits are based on a percentage of their earnings during a specified number of years, usually at the end of their careers. The other 2 percent of workers participated in cash balance plans, where employees are credited with a specified contribution and a rate of interest on the contribution; the benefits are provided as a lump sum and may be converted to an annuity.

These data are from the National Compensation Survey — Benefits program. To learn more, see National Compensation Survey: Retirement Plan Provisions in State and Local Government in the United States, 2016. Defined benefit pension plans provide employees with guaranteed retirement benefits based on benefit formulas. A participant’s retirement age, length of service, and preretirement earnings may affect the benefits received. For more definitions of benefits terms, see National Compensation Survey: Glossary of Employee Benefit Terms.