No one would argue that attracting the nation's best and the brightest to public-sector service is a worthy and important goal. This goal is elevated from "worthy" to "imperative" when you consider (1) the impending retirement of the baby-boomer generation; (2) the preference of many young people interested in public service for pursuing nonprofit jobs before considering government work; and (3) the pay disparity -- between the public and private sectors -- for top talent. It is not a foregone conclusion that we will we be able to attract the talent required to manage the complex environment of tomorrow's state and local governments.
Identifying creative approaches to attract and develop a cadre of skilled, committed, and trained individuals to serve in state and local government is the vision of the Center for State and Local Government Excellence, which will launch this spring with support from the ICMA Retirement Corporation.
ICMA-RC itself was an innovative solution to an earlier problem. When ICMA formed the Retirement Corporation in 1972 with a grant from the Ford Foundation, public employees depended entirely on defined-benefit plans; they had no vehicle that would allow them to make tax-advantaged contributions to a retirement plan and then take those funds with them when they changed jobs. Since many defined-benefit plans required five or ten years of service before employees became vested, public service professionals who changed jobs with relative frequency often retired after a distinguished career to find themselves without a pension. Using the Ford Foundation grant, ICMA created ICMA-RC as a nonprofit corporation, establishing the first nationally portable retirement plan in the public sector. ICMA-RC currently has $28 billion under management and administers more than 7,000 plans for more than 5,000 sponsors and employers and 700,000 public employees.
Historically, public-sector workers could expect decent pay and good benefits, particularly in the area of retirement income and health care. However, tight budgets, the growing number of retirees and accompanying cost of benefits, and new Governmental Accounting Standards Board reporting requirements have cast pensions and other post-employment benefits in a drama that will be played out on the public stage. Without good information about the actual costs of these programs, state and local governments run the risk of managing these costs in a vacuum.
Today, state and local governments have a new set of issues to tackle as the baby boomers approach retirement age. These include: How will we create and sustain high-performance organizations that can attract and retain top talent and produce results that matter most to citizens? How will we finance the pensions of the current workforce? How do we deal with health care for the large baby-boom generation of public employees? Are the current approaches to wages and benefits financially sustainable and attractive to a new generation of workers?
Enter the Center for State and Local Government Excellence. The center will focus on research in the areas of public-sector retirement and retiree health savings security. Its executive board consists of national leaders who have served in the highest levels of government, the media, and state and local government associations. Specifically, the board includes National League of Cities Executive Director Don Borut, National Governors Association Executive Director Ray Scheppach and Government Finance Officers Association Executive Director Jeff Esser.
Partnering with leading universities and researchers working in the areas of pensions and retiree health care, the center will produce studies on the impact of demographic trends on employers in state and local governments and document leading practices to shorten the learning curve for employers. In addition, the center will develop -- and advocate for -- best-practice approaches to compensation, health care, retirement, and other benefits.
The center brings no ideological ax to grind on public-sector pensions; it will simply work to ensure that the men and women who serve in our state and local governments can count on pension and retiree benefits. Simultaneously, it will work to engender support for the value a highly trained public-sector workforce contributes to the quality of life in our communities. As the public discussion over how to ensure that public employees have the stable retirement they deserve continues, there is a growing need to ascertain the facts and bring common sense, level-headedness, and creativity to the debate. The center will do just that.
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