According to a 2002 survey by the Council of State Governments, states will face an increasing shortage of qualified public health workers over the next decades. Offering portable pension benefits is a strong incentive for recruiting and retaining qualified public health leaders, making it easier for them to move from one state or public health system to another, thereby serving as sources of innovation and improved practice.

In 2006, investigators with the Council of State Governments, Southern Legislative Conference conducted a 50-state survey and produced a white paper examining the portability of pension benefits for public health officials.

The survey examined four mechanisms that allow portability of benefits: direct rollover from a previous employer, the installment purchase of service credits, pretax purchase of service credits, and interstate and intrastate reciprocity agreements.

Key Findings

Investigators received a 100 percent response rate from the survey respondents, who included public officials charged with overseeing and administering retirement plans in the 50 states.

They reported their findings in a white paper, entitled "Pension Portability Among Public Health Officials." Key findings include:

• All 50 states offered a defined-benefit plan to their public employees, including public health officials; 26 offered only a defined-benefit plan, while the remaining 24 states responded that they offer both defined-benefit and defined-compensation plans. Although benefits are portable under both plans, a worker's ability to transfer accumulated benefits upon changing jobs is less complicated with a defined-compensation plan.
• More than half (28) of the 50 states that maintain defined-benefit pension plans do permit direct rollovers into their plans from public health officials who had terminated service at another employer and sought to transfer funds from the qualified retirement plan of the previous employer. The remaining 22 states do not permit such direct rollovers into their defined-benefit plans.
• Eleven states with defined-compensation pension plans accept direct rollovers.
• The purchase of service credits, either by installment or with pretax dollars, is the most common approach to portability in defined-benefit plans. Of the 50 states with defined-benefit plans, 37 allow the installment purchase of service credits by public health officials, and 36 permit them to use pretax dollars to purchase credit for time previously served in another public entity.
• Among states with defined-compensation plans, only two allow installment purchases, and only three permit employees to use pretax dollars to purchase credit for time previously served in another public entity.
• A majority (36) of the states indicated they have agreements permitting intrastate reciprocity between eligible plans in their own states. The remaining 14 states indicated they do not have such agreements permitting reciprocity at the intrastate level.
• At the interstate level, four states have agreements that permit the purchase of credits for out-of-state service, a relatively rare trend in the realm of public pension plans.

Other Activities

In addition to the survey, investigators conducted a literature review of publications from groups such as the Council of State Governments, the U.S. Department of Health and Human Services, and the Pension Benefits Guaranty Corporation.

Funding

The Robert Wood Johnson Foundation (RWJF) provided a solicited grant of $23,584 to support this project.

After the Grant

The project team distributed copies of the white paper to survey respondents in the 50 states and members of the Southern Legislative Conference. The white paper is available online from the Web site of the Council of State Governments, Southern Legislative Conference.