Defined benefit plans such as pensions—in which participants are guaranteed a specific income from retirement onward—have obvious benefits for employees. If you’re looking for a job with a pension, you may want to consider certain industries, employers, and job types.
What Is a Pension?
A pension is a retirement plan that provides monthly income during retirement. Pensions are defined benefit plans, in contrast to 401(k)s and IRAs, which are defined contribution plans. The difference between the two types is that defined benefit plans are typically funded by an employer or labor union, while a 401(k) or IRA is funded by employee contributions (sometimes with added contributions from the employer). Further, a defined benefit plan promises a specific income, while a defined contribution plan does not. If you have a pension, you will receive a set monthly income in retirement. The amount of this income may be determined at a flat rate or as a formula that takes into account your salary and years of service with an organization. The Employee Retirement Income Security Act of 1974 (ERISA) protects retirement plans, including pensions. Under ERISA rules, your employer can require workers to accrue five years of service in order to be 100% vested in pension benefits. If your employer opts for a seven-year schedule, they must provide at least 20% vesting after three years.
Types of Employers That Provide Pensions
Since the creation of the 401(k) in the late 1970s, employer participation in pension plans has dropped sharply. Defined contribution plans such as 401(k)s offer employers cost savings, lower risk, and less government regulation. However, unlike pensions, 401(k)s make no guarantees about income during retirement. Unsurprisingly, pensions remain a popular benefit among workers. But if you’re looking for a job with a pension, you’ll need to look carefully. Certain industries and employers are more likely to offer pensions than others. Government workers are much more likely to have access to pension plans than private-sector workers. According to BLS data, 75% of state and local government workers participate in pension plans. U.S. federal civilian employees are covered by the Federal Employees’ Retirement System (FERS), which includes a pension plan as one of its benefits. FERS-eligible employees also have access to the Thrift Savings Plan (TSP), which is similar to a 401(k). Among private-sector workers, those with union jobs are more likely to have pensions than those who are not in unions.
Top Companies That Offer Pensions
Another approach is to look for private-sector jobs with employers who offer pensions. Note that fewer employers fit this description nowadays. Many private employers who once offered pensions have frozen these benefits and replaced them with 401(k)s for new employees. However, in May 2022, these private employers were still offering pension benefits, often in addition to 401(k)s:
3M: The manufacturing conglomerate offers both a 401(k) with a matching contribution and an employer-funded pension plan.Coca-Cola: The beverage company offers a highly rated employee pension plan, as well as a 401(k) with an employer match of up to 3.5%.ExxonMobil: Exxon’s pension offers an unusually early possible retirement age of 50. Early retirees also get an additional temporary benefit of a pre-Social Security pension to make up for the SSA benefit they’re not yet entitled to receive. Prudential: Insurance giant Prudential’s cash balance retirement plan (also known as a pension) is open to all employees and is based on a formula that adds credits for each month of service.
Best Jobs With Pensions
The best jobs with pensions meet certain standards: they offer above-average pay, a strong occupational outlook, and high job satisfaction. These are among the best jobs with pensions:
Teacher
Elementary, middle school, and high school teachers who work at public schools are often members of teachers’ unions, which offer pensions among their benefit plans. The BLS reports that high school teachers earn a median annual salary of $61,820. Jobs in this field are expected to increase by 8% between 2020 and 2030.
Registered Nurse
Like teachers, registered nurses in some states belong to unions, which provide pensions as well as 403(b) plans—the non-profit equivalent of 401(k)s. RNs earn a median annual income of $77,600 and can expect occupational growth of 9% over the next decade.
Police Officer
Police officers are often members of unions and have pensions. Police officers and detectives earn a median annual salary of $66,020 per the BLS, and will see a 7% increase in jobs between 2020 and 2030.
Electrician
Electricians learn their trade through apprenticeships or trade schools. Like most of the other jobs on this list, electrical work is often a union job. Electricians earn a median annual salary of $60,040. The BLS projects 9% growth in this occupation over the next 10 years.
Government Worker
Federal, state, and local government jobs often come with a pension. There is a wide range of job titles under this umbrella, from administrative staff to engineers to federal law enforcement.
Tips for Finding a Job With a Pension Plan
Here are some ways you can streamline your search for a job that offers a pension:
Apprenticeship programs are a pathway to well-paying positions that may offer a pension. You can use the Department of Labor’s Apprenticeship Job Finder to apply directly to employers and program sponsors. For federal government jobs, USAJobs.gov is a good place to start your search. Check with your state department of labor, county, and town or city employment website for information on state and local government jobs. Search the top job sites using keywords such as “pension” and “pension plan” to find job postings for positions that offer a pension.
