Let's start with the bad news first.
Spurred by comments made by several of PUBLIC WORKS' Salary & Benefits survey participants last year, we asked, rather tongue in cheek, if your benefits are flying south. We knew the answer: Budget constraints due to a sluggish economy and rising health-care costs were adversely affecting benefits packages, especially for nonunion employees. Already some of last year's respondents said they were experiencing diminishing benefits, increased employee contributions, and more out-of-pocket expenses.
Since our last salary survey, the turmoil in U.S. financial markets has pushed the economy into a nosedive. The credit crunch is making it difficult for cities to procure credit and bond financing, and — according to a National League of Cities survey of finance officers conducted earlier this year — fiscal conditions are only going to get worse. Eighty-three percent of those finance officers have cut expenditures and services — via methods that include hiring freezes, layoffs, and delaying or canceling infrastructure projects — and 80% anticipate making further cuts. Fourteen percent had to rework employee and retiree health-care plans.
This year we emphasized benefits in our annual survey to learn just how the economic downturn is affecting quality-of-life issues for public works personnel. Surprisingly, the situation isn't as grave as we anticipated — yet.
Although 70% of respondents say their city, county, or state has enacted budget cuts, only 16% say they're experiencing a reduction in benefits. One-third are experiencing raise and promotion freezes, and nearly one-quarter are seeing less overtime; but only 5% have been subjected to pay cuts, and even fewer — 3% — to pension cuts (see the sidebar on page 40 for more on public-sector pensions).
And though 38% of respondents don't anticipate a pay increase over the next year, 43% expect a 1% to 3% increase. Of course, as some respondents pointed out, that increase doesn't quite cover inflation, however minimal; and quite a few say they won't be receiving COLA (cost-of-living allowance) funds in the coming year to help compensate.
Thus, our exclusive survey reveals that the crux of concern lies within the cost of, rather than access to, benefits. More than half of respondents are paying higher insurance premiums this year. Gone are the days when the department or union picked up the entire bill for medical insurance. Only 15% of respondents don't have to pay anything for healthcare insurance; an additional 9% began paying premiums within the last five years.
Says one Midwestern water/wastewater/storm-water foreman, “[Future] wage increases will not match — they already don't — the health insurance increases.”
Survey participants who took the time to comment expressed an underlying concern that stagnant salaries combined with increased employee contributions for benefits and out-of-pocket health-care costs act as pay cuts. Several mentioned that although they are paying more for health care, they are receiving l less coverage than in the past. Another thought that keeps them wary: Shrinking property, gas, and other tax revenues may force public agencies to slash benefits during the next 12 to 24 months.
SO WHAT'S THE GOOD NEWS?
More than half of respondents (54%) still feel that their benefits are better than those offered to colleagues working in the private sector, and 20% say their benefits are comparable. Only 13% feel that private-industry benefits are more competitive than their own.
Overall, those entering the profession can expect to see:
Paid holidays (97% of respondents are offered this option by employers)
- Vacation days (97%)
- Health insurance/benefits (95%)
- Sick leave (93%)
The majority of respondents also receive:
Dental insurance (83%)
- Life insurance (80%)
- Pension plan (80%)
- 401(k), 403(b), 457(k), or other savings plan (75%)
And more than half of those surveyed receive:
Paid training — CEUs/PDHs, other (69%)
- Accidental death & dismemberment (AD&D) insurance (63%)
- Vision insurance (63%)
- Paid professional registration/association memberships (62%)
- Disability leave (61%)
- Flexible spending accounts (61%)
- Tuition reimbursement (57%)
- Cell phone or phone allowance (53%)
Nearly 8 of every 10 respondents (76%) are somewhat to very satisfied with their benefits packages, and more than a third say they will stay in their jobs because of those benefits. When asked how benefits impact job satisfaction, 17% say they have no impact and more than half say they have better benefits than most and enjoy their jobs.
Other than a job, that's something worth holding onto in this economy.
The editors of PUBLIC WORKS thank the 1257 readers who completed our online survey, and congratulate the 10 who were randomly selected to receive $25 gift cards.
Your retirement plan's in better shape than you think
Public pension plans are more durable than private.
Although one reader suggested “your pension plan may be used for a flotation device” as the theme for our 2009 annual outlook issue (see January issue), research shows that cynicism may not be justified. Although the economy will affect all retirement plans, public employees will come out ahead of colleagues in the private sector.
Even though they pay larger benefits and don't have to meet nationally mandated standards, a Center for State and Local Government Excellence study shows that the assets of public pension plans cover 90% of liabilities. Assets per worker increased significantly after 1994, when the Government Accounting Standards Board issued Statements 25 and 27 to change how state and local governments account for and report retirement funding.
Local plans have a better track record than state plans — 69% vs. 54% — in making required contributions, and their average funding ratio is one percentage point higher.
In general, according to the National Institute on Retirement Security, public pensions follow best-investment practices during bull and bear markets, avoiding the pressure to invest more aggressively after experiencing losses.
Visit www.slge.org for more details from “The Funding Status of Locally Administered Pension Plans” and “The Miracle of Funding by State and Local Pension Plans;” and visit www.nirsonline.org for “In it for the Long Haul: The Investment Behavior of Public Pensions.” — Stephanie Johnston
How does your salary compare?
This region-by-region analysis compares median salaries of survey respondents by population served. You can find median salaries by title or by title and department/area of work. Note: Not all titles, departments, etc. are represented due to lack of survey respondents from those areas.