Traditional pensions that pay out guaranteed benefits for life aren't easy to come by these days, as most employers have long since abandoned their traditional pension plans in favor of 401(k)'s. Still, there are some holdout industries that continue to reward lifelong employees with gold-plated retirement benefits. Here are a few places to look for jobs that may offer the coveted traditional pension.
Public service. Local, state, and federal government positions are the most likely to come with top-notch retirement benefits. Approximately 80 percent of state and local government workers had access to a traditional pension as of September 2007, according to the Bureau of Labor Statistics. "Police officers, firefighters, teachers, and judges have always had pension plans," says Olivia Mitchell, executive director of the Pension Research Council at the University of Pennsylvania's Wharton School. Government jobs that are the most likely to include pension coverage are primary, secondary, and special education school teachers (96 percent), management or professional positions (86 percent), and protective services (84 percent). Joining a union also helps. Nearly all (95 percent) union government employees were offered a traditional pension in 2007. "If you are going to devote yourself to a public calling, there is something in it for you in terms of retirement security in the end," says Beth Almeida, executive director of the National Institute on Retirement Security.
Large, private companies. Pensions are much more difficult—but not impossible—to find in the private sector. Although only 21 percent of all private-sector workers were offered traditional pensions in 2007, employees at large, financially sound companies may still get guaranteed retirement payouts for the rest of their lives. Some 34 percent of companies with 100 workers or more offered a traditional pension in 2007, while only 9 percent of firms with fewer than 100 workers did, according to the Bureau of Labor Statistics. Some small employers also band together to form large multiemployer pension arrangements. A union card just might be your ticket to a secure retirement in the private sector. About 70 percent of private-sector union workers successfully negotiated for solid retirement benefits in 2007. Management and professional positions are the most likely to come with pensions (29 percent), followed by natural resources, construction, and maintenance positions (26 percent) and production, transportation, and material moving jobs (26 percent). A few sales and office jobs come with pensions (19 percent). Meanwhile, service-sector jobs are the least likely to come with retirement benefits (8 percent). Where geography is concerned, employees who work in the mid-Atlantic, Northeast, and Pacific coastal regions of the country are the most likely to get retirement benefits, especially in metropolitan areas.
The number of employers providing pensions continues to decline every year. Many companies are now prohibiting new employees from joining the pension plan, and some companies are even freezing new accruals for existing workers. So far this year, at least 21 large companies have frozen their pension plans, according to the Pension Rights Center, including Wells Fargo, Cigna, and Anheuser-Busch. About 45 percent of Fortune 100 companies currently offer traditional or hybrid pensions to new hires, according to consulting firm Watson Wyatt, down from 49 percent in 2008 and 90 percent in 1998. Energy companies, pharmaceutical companies, and some manufacturing companies are the most likely to offer traditional pensions, according to Alan Glickstein, a senior retirement consultant at Watson Wyatt. Glickstein also predicts that technology companies, most of which don't currently provide traditional pensions, may add traditional or hybrid retirement plans to attract top talent as the industry matures and the workforce ages.
Very small businesses. Although small businesses are generally less likely to offer pensions than larger companies, the exception is ultrasmall companies with five or fewer employees, such as dentist or law offices, as well as mom and pop shops (with perhaps only one receptionist in addition to the family), according to Fran Hawthorne, author of Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street. "Very often, the owners of small doctor's offices set up the pension plan because they want a tax-free way to put money aside for retirement," she says. "The law requires that if you do this, you must provide the same pension for all your employees based on income."
Payouts are likely to be higher if you spend several decades working for a single employer, although some hybrid pension plans are more portable. "If you don't get a job with a pension now, your odds go down every year because more and more [pensions] freeze each year," says Hawthorne. If you get your foot in the door now, you get to keep what you've accrued so far, even if the pension is frozen at a later date. You'll also get your promised payout no matter how the stock market performs immediately before you retire. If the company goes out of business, most workers still get retirement benefits because most private-sector pensions are insured by the federal government.
Once you score a job with a pension, don't brag about your cushy retirement plans to pension-less peers. "You see a lot of pension envy on the part of workers in the private sector who don't get a pension," cautions Nancy Hwa, a spokesperson for the Pension Rights Center. "I think people too often look at it as a perk when it's as much a part of your compensation package as your weekly paycheck."