Still Securing Retirements: Which Companies and Sectors Offer Pension Plans Today

Pension plans have largely vanished from corporate America, yet select employers and sectors continue to deliver this retirement security benefit. Government agencies, public institutions and companies within unionized industries remain among the few organizations offering pension arrangements to their workforce. For those considering long-term career stability paired with retirement security, understanding where pensions persist can inform important employment decisions.

What Makes a Pension a Valuable Retirement Asset

A pension represents an employer-sponsored retirement arrangement that delivers predetermined monthly income once employees reach retirement age. Unlike defined contribution plans such as 401(k)s—where payouts fluctuate based on investment returns—pensions function as defined benefit plans with guaranteed payouts calculated through a fixed formula typically incorporating salary history and tenure.

The appeal of pensions lies in several key advantages:

• Predictable income stream: Monthly payments remain stable regardless of market conditions
• Employer responsibility: Organizations bear the funding burden, relieving workers of sole savings responsibility
• Lifetime security: Payments continue throughout retirement, protecting against outliving savings
• Family protection: Many plans extend income to surviving spouses

The Shift Away From Corporate Pensions

The trajectory of pension availability reveals a dramatic transformation. When tax law reforms during the 1980s enabled pre-tax retirement savings, companies began abandoning traditional pension commitments. Between 1987 and 2022, private-sector employer contributions to defined-benefit pension plans contracted from 86.1% to 29.4%, according to Bureau of Labor Statistics data. Simultaneously, worker reliance on defined-contribution arrangements surged from 13.9% to 70.6%.

Declining union membership accelerated this trend. A 2023 Bureau of Labor Statistics report indicated that 66% of unionized private workers maintained access to defined-benefit pensions, compared to just 10% of nonunion private-sector employees. Today, pensions concentrate primarily within government agencies, military branches and specific public-sector organizations.

Seven Categories Where Pensions Remain Available

Despite the broader decline, multiple employers and sectors within government and select industries continue offering pension benefits:

1. Federal government positions — Agencies including the FBI, IRS and NASA provide retirement security through the Federal Employees Retirement System (FERS), combining pension benefits with supplemental defined-contribution options.

2. State and local government roles — Law enforcement, firefighting and public administration positions frequently include pension arrangements funded through employer and employee contributions.

3. Military careers — Service members completing at least 20 years receive government-funded pensions calculated from years served and the highest three-year average base compensation.

4. Public education — Teachers access state-administered pension systems delivering lifetime payments following specified years of service requirements.

5. Utility sector employment — Electric, gas and water utility companies maintain pension offerings, particularly through unionized workforce agreements.

6. Unionized industries — Construction, transportation and related sectors preserve pensions negotiated through collective bargaining, protecting worker retirement security.

7. Public healthcare roles — Nurses and healthcare professionals employed by state or local government facilities typically receive pension coverage as part of compensation packages.

Pension Alternatives for Other Workers

Those working for companies without pension offerings can pursue several substitute approaches:

401(k) plans provide employer-sponsored savings where workers contribute salary portions and companies frequently match contributions. Retirement income depends on investment performance and accumulated balances.

Individual Retirement Accounts (IRAs) enable independent retirement savings with tax advantages through traditional or Roth structures, benefiting those lacking employer-sponsored plans.

Thrift Savings Plans (TSP) serve federal employees and military members with low-cost investment vehicles and employer matching contributions similar to 401(k) structures.

Annuities function as insurance products delivering lifetime income payments, replicating pension-like security through individual purchase arrangements.

Planning Your Retirement Security

While companies that still offer pensions concentrate within specific sectors, retirement security remains achievable through alternative strategies. Whether pursuing traditional pension employment or leveraging defined-contribution vehicles and personal savings accounts, comprehensive retirement planning requires thoughtful analysis of available options, target savings goals and investment approaches suited to individual circumstances and risk tolerance.