Engaging in paid employment after claiming retirement benefits may be an important avenue for individuals to work longer as life expectancies rise. After separating from one's career employer, individuals may engage in paid work to stay active or to supplement their current level of retirement savings or both. Individuals who choose not to work after claiming may be expressing their preference to stay retired, perhaps because their retirement income is sufficient. However, the decision to work after claiming may be driven by the lack of retirement planning and insufficient savings, while the lack of post-claiming work may reflect the inability to find adequate employment opportunities. We use administrative records merged with panel data from several surveys of public employees in North Carolina to study the decision to engage in paid work after claiming retirement benefits. More than 60% of active workers plan to work after claiming benefits, while only around 42% of the same sample of individuals have engaged in post-claiming paid work in the first few years after leaving public sector employment. Despite this gap, stated work plans are strongly predictive of actual post-claiming work behavior. Our final analysis uses self-reported measures to gauge the financial well-being of our sample in the early years after leaving career employment.

Choices regarding the disposition of wealth at retirement can have substantial implications for retirement income security. We analyze the factors determining annuity payout option choices within the context of a public sector defined pension plan with no default annuity option. Using combined administrative records and survey data, we explore the role of individual and household characteristics as well as risk preferences, time preferences, and financial literacy. We also document retiree well-being and satisfaction with retirement decision making. The evidence is consistent with predictions over which households might benefit most from each annuity option. Comparing retirees who chose different types of annuities, we find that these groups of retirees report very different levels of well-being in retirement. All retirees report lower levels of retirement income security over time, with strong differences among those who chose different types of annuities.

We investigated labor force and health outcomes in cities experiencing fiscal difficulties to assess how those difficulties might impact their employees. We matched 23 cities with bond downgrades and 31 cities with stable bond ratings to sampling units in the Medical Expenditure Panel Survey. Starting the year before the downgrade and for the four subsequent years, the rate of separation from local public employment fell in the cities with downgrades relative to the comparison group. Self-reported health may have worsened, but there were no statistically significant effects on health care use or spending.

While no longer common in the private sector, most public sector employers offer retiree health insurance (RHI) as a retirement benefit to their employees. While these plans are thought to be an important tool for employers to attract, retain, motivate, and ultimately retire workers, they represent a large and growing cost. This paper reviews what is currently known about RHI in the public sector, while highlighting many important unanswered questions. The analysis is informed by data produced in accordance with the 2004 Government Accounting Standards Board Rule 45 (GASB 45). We consider the extent of the unfunded liabilities states face and explore what factors may explain the variation in liabilities across states. The importance and sustainability of RHI plans in the public sector ultimately depend on how workers view and value this post-retirement benefit, yet little is known about how RHI directly impacts the public sector labor market. We conclude with a discussion of the future of RHI plans in the public sector.

This study uses a unique data set of retiree characteristics and salary histories for administrators, teachers, and non-professional employees of the Denver Public School Retirement System (DPSRS) to analyze surplus deferred compensation for DPSRS and four state K-12 defined benefit pension plans. We find sizable levels of surplus deferred compensation for each plan, with significant differences across plans, job classes, and age groups. Across plans, differences in cost of living allowances impact the expected present value of retirement benefits more than benefit table differences when controlling for each respective factor. Somewhat surprisingly, the plans in our study with the largest present value of future benefits had lower employee contribution rates. Pension wealth for reduced benefits showed larger wealth accrual at younger ages than full, unreduced benefits, and younger cohorts starting work at an earlier age received significantly higher surplus deferred compensation.