September 29, 2015 10:00AM

Government Workers More Satisfied with Retirement, Health Insurance, and Vacation Benefits

A recent Gallup poll finds that government employees are considerably more satisfied than their private sector counterparts with their compensation fringe benefits--namely government retirement plans (+25), health insurance benefits (+23), and vacation time (+17).

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The poll compared satisfaction with 13 different job aspects for both government and nongovernment employees, ranging from stress on the job, flexibility, recognition, salary, relations with coworkers and bosses, etc. In 9 of the 13 characteristics, government and private sector workers reported similar levels of satisfaction (all above 60%) with job stress, recognition, flexibility, safety, salary, hours, promotion opportunities and job security. 

However, 82 percent of government workers reported being completely or somewhat satisfied with their retirement plan compared to 57 percent of their private sector peers, a +25 point difference. Government workers typically receive defined benefit pension plans, which typically offer employees a guaranteed monthly amount in retirement. In contrast, private sector workers’ retirement plans are not guaranteed but based on the amount they save, their employer contributes, and investment returns.

Again, 80% of government workers say they are satisfied with their health insurance benefits compared to 57% of private sector workers (a +23 point difference). Gallup reports that government worker health insurance plans typically require lower out-of-pocket costs than found in the private sector, which may explain these differences.  

In addition, fully 9 in 10 government employees are satisfied with their vacation time compared to 74% of private sector employees (a +17 point difference).

These stark disparities in satisfaction with retirement and health insurance benefits and vacation between government and private sector workers may indicate that government workers receive “above market” fringe benefits, meaning they receive more than what the market would pay. The fact that government and non-government workers report similar satisfaction with their salaries, but significant differences in non-salary perks raises the question if government employee compensation packages should be adjusted to match market offerings.

Research Assistant Nick Zaiac contributed to this post.

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