Jobs with pensions
Most jobs no longer provide traditional pension plans that promise workers guaranteed income in retirement. Only 17 percent of private industry employees were offered a traditional pension plan in 2018, according to Bureau of Labor Statistics data. But a few jobs and industries continue to provide workers with steady pension payments in retirement. Jobs that offer pensions tend to be clustered in a few specific fields. Government and union employees are especially likely to have access to pension benefits. Consider these jobs that bestow a steady paycheck after you retire.
The majority (89%) of primary, secondary and special education teachers who work in schools enjoy access to a traditional pension plan for retirement, according to BLS data. Over half (59%) of employees at colleges and universities also have pension coverage. “Teachers are still predominantly covered by defined benefit pensions,” says Melinda Morrill, associate professor of economics at the Poole College of Management at North Carolina State University. “Although public employers are making some movement away from these plans, the vast majority of public sector workers are still covered by defined benefit pension plans.” The median pay is $57,980 at the elementary school level and $60,320 at the high school level, which can vary considerably by state and school district. Teachers who meet the pension requirements can expect to continue to receive a specific portion of their former salary in retirement.
State and local government
Almost all state and local government employees (86%) are eligible for a traditional pension plan. “The government, federal, state and local, would still be the most common place to find defined benefit pensions,” says David Love, a professor of economics at Williams College. “Some state and local governments have been in the news for switching to defined contribution plans, but I believe that defined benefits are still widely available for new employees.” The state government has slightly higher pension coverage than local government, and union government employees are somewhat more likely to have a pension than nonunion workers. In many cases, part-time government employees don’t qualify for the pension plan.
Utility companies provide pension coverage to 73% of their employees, according to BLS data. And over half (54%) of utilities in the Fortune 500 have a pension plan that is open to new hires, Willis Towers Watson found. Some utility companies have closed the pension plan to recent hires, but continue to provide pension benefits to existing workers. “Utilities are typically heavily unionized and generally prefer to keep their retirement structure consistent between their union and nonunion workforces,” according to the Willis Towers Watson report. “Moreover, many jobs at utilities companies are physically demanding, and defined benefit plans facilitate retirement at an appropriate time.”
Just over half (55%) of workers in the protective service are eligible to participate in a traditional pension plan. “Police officers and firefighters are likely to have access to a traditional defined benefit pension plan,” says Elizabeth Kennedy, associate professor of law and social responsibility at Loyola University Maryland. Police officers and detectives earn a median of $63,380 per year, which is considerably more than the $49,620 median salary for firefighters. Many protective service jobs have rigorous physical qualifications necessary to perform the role. The pension plans provide for former employees who may no longer be able to meet the physical demands of the job.
The BLS reports that 43 percent of workers in the insurance industry have access to a traditional pension plan. Among large insurance companies in the Fortune 500, 60 percent provide a defined benefit plan. “The type of employees that they have are longer tenure and more likely to appreciate and understand the defined benefit plan,” says Royce Kosoff, managing director for retirement at Willis Towers Watson. Retirees with a traditional pension plan face less risk of investment losses or running out of money than former employees with a 401(k) account to manage on their own.
Half of Fortune 500 pharmaceutical companies have a traditional pension plan, Willis Towers Watson found. It takes a long time to conduct complex pharmaceutical research and bring a unique product to market. A retirement benefit that rewards long-term employees helps pharmaceutical companies to retain experienced individuals. “They need talent in this industry, and that defined benefit plan is a really important part of their overall benefit package,” Kosoff says. “They can’t have you picking up and taking that knowledge elsewhere, especially later in your career after you accumulate that knowledge.”
Nurses spend their days caring for others, and 42% of registered nurses will eventually receive pension payments in retirement. Those who work in hospitals are especially likely to have access to a defined benefit pension. Registered nurses earn a median of $71,730 per year. The need for nurses is expected to grow as the baby boomer population ages and requires more medical services. The Bureau of Labor Statistics projects a 15 percent increase in nursing jobs by 2026.
Almost a third (32%) of transportation and warehousing employees are eligible to participate in a traditional pension plan. “In the private sector, the only industries in which new employees have meaningful access to traditional pension plans are those with high union density, such as transportation, construction, manufacturing and maintenance,” Kennedy says. Depending on the employer, some drivers or certain groups of workers at airlines might be eligible to participate in a pension plan, although many plans have been frozen or closed to new employees.
Service members on active duty or who serve in the reserves or guard for a designated period of time, often at least 20 years, may qualify for payments in retirement. The military uses several different methods of calculating retirement payments, but, in general, those who serve for longer periods of time receive more generous payments in retirement. Military pensions are adjusted to keep up with inflation each year, and retirees can elect to participate in a survivor benefit plan that will provide annuity payments to surviving family members.
A union card might be your ticket to more comprehensive retirement benefits. Some 80% of union members have access to a defined benefit pension plan, compared to 18% of nonunion employees, according to BLS data. “The unionized workforce includes a range of jobs and occupations, many of which look very different from those historically organized by their union,” Kennedy says. “For example, the United Steelworkers Union represents over 850,000 workers across a wide range of industries and jobs, from sheet metal fabrication to health care and from forestry to pharmaceuticals.” Unions often negotiate for better retirement benefits on behalf of their members.
Check out these jobs with pensions:
— State and local government.
— Protective service.
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Update 03/14/22: This story was published at an earlier date and has been updated with new information.