Using a Pension Plan to Improve Retention

By Bolton August 12th, 2022

No one will argue that retention is a big issue for all employers these days.

"Turnover can be one of the most expensive problems at a company."

-Shawn Achor

The statistics are staggering.

  • Since the beginning of 2021, about 3% of the workforce has quit their jobs every month. This is the highest levels we have seen in decades.
  • In 2021, over 47.8 million workers quit their jobs, making 2021 the highest on record.
  • In 2022, the number of employees quitting their jobs has remained at over 4 million per month.

Many employers, public and private alike, are scrambling for strategies to retain many types of employees. What many employers do not realize is that public sector and private sector employers can utilize their pension plans to help improve retention.

"Employers who recognize the importance of investing in their workforce have a more productive workforce, a more efficient workforce, a more loyal workforce, less turnover, and, in the private sector, more profitable."

-Valerie Jarrett


We at Bolton have brainstormed on about a dozen strategies for using the pension plan to improve retention. The strategies range from improved communication about the value of the pension program to significant enhancements to plan benefits. There are many affordable options available to employers. Private sector plans will have to pass non-discrimination testing issues. In contrast, public sector plans are generally not limited by this constraint. The advantage of using the pension program versus giving additional cash is that the monies can be tax deferred. Using the pension plan can also help with a more orderly transition of workforce knowledge. Even though we are using the retirement plan for improving retention, some of the solutions are not just for older more experienced employees. There are useful tools for retaining early and mid-career employees as well.

Implementation considerations

When implementing a retention program through the retirement plan, employers need to consider legal and regulatory issues, plan design, administration, ease of communication, implementation and any bargaining issues. Bolton is working with our clients to effectively manage these challenges and implement an effective program.


We also focus on how effective each strategy will be based on each client’s unique workforce. We are working with clients to conduct surveys to get employees reactions to each strategy to determine which strategy may be the most effective for each client. After we determine the most effective strategies, we partner with our clients on design, cost, communication and implementation.

Please contact Jim Ritchie at or your Bolton consultant to hear more about our retention strategies.