By 2016, more than 25 percent of active Missouri state employees will be eligible for retirement. In a recent study conducted by Angela Curl, assistant professor at the University of Missouri School of Social Work, Curl suggests the state may need to reexamine deferred retirement incentives to protect the stability of the workforce.
“Employers need to ask if their organizations are designed to promote turnover or promote retention. States should recognize the benefits of promoting retention,” Curl said.
The concern with such a large amount of the workforce becoming eligible to retire all at once is that the “continuity, membership and institutional histories of the state government workforce” may be threatened, according to Curl. Additionally, Curl suggests that states should take necessary steps to retain skilled employees in positions that are difficult to fill.
The study specifically looks at Missouri’s Deferred Retirement Option Provision, or BackDROP. Under the BackDROP program, state employees who have worked at least two years beyond their normal retirement eligibility date are qualified to receive a lump sum payment of 90 percent of the benefits they would have received had they retired when eligible. The state has since discontinued this program for new hires.
The study, titled “A case study of Missouri’s deferred retirement incentives for state employees,” looked at 296 Missouri state employees to define what circumstances or predictors determined if the employee chose to defer retirement or not. The study found that the best predictors of this decision were the employees’ knowledge of retirement options, what their job entailed and the age they became eligible to retire. Employees who were aware of BackDROP and who had become eligible to retire at an older age were more likely to defer retirement. The study also found that social demographics such as race, sex, level of education and marital status did not play a significant role in an employee’s decision to defer retirement.
Curl’s research was co-authored by Kirsten Havig and will appear in the Journal of Aging and Social Policy.