Alaska is retaining public workers better than most states

Alaska’s public employee turnover has been a topic of much legislative scorn since the state transitioned new hires away from traditional pensions, offering a defined contribution retirement system instead. Many public employee groups and sympathetic legislators have wondered if this transition has hindered Alaska’s ability to recruit and retain teachers and other public employees by removing an incentive perceived to be granted through traditional pension benefits. Data from the state indicates that was not the case. In fact, Alaska seems to be retaining public employees better than most other states.

In 2006, to address rising costs and funding challenges, the state transitioned new employees to a defined contribution (DC) plan similar to the 401(k) plans that nearly all private sector workers have. Government-sponsored defined benefit (DB) pension systems often become underfunded due to the difficulties in accurately pre-funding employees’ future retirement benefits.

Like most U.S. states, Alaska has grappled with unfunded employee pension liabilities. This debt has escalated year after year, topping over $7 billion in 2023, despite massive increases in contributions from the state.

Despite concerns, official turnover data does not show Alaska has ever encountered a unique retention crisis. Alaska’s public employee turnover is actually quite typical, lower than that of many states offering DB pensions today, which is surprising given Alaska’s reputation as a state with high employee turnover in the private sector.

Since Alaska does not publicly release the turnover rates of its employees, this analysis relies on turnover data provided directly to the Reason Foundation upon request. For more details on data and sources, please refer to the technical note at the end of this piece.

Alaska’s public employee turnover rate is typical among states.

Turnover among Alaska’s public employees remains within typical ranges for U.S. states. In 2022, Alaska reported a turnover rate of 18%. Among the 24 states that publicly report public employee turnover data in workforce reports, Alaska’s rate is typical and lower than that of several states offering defined benefit (DB) pensions, including Texas (23%), Utah (28%), and Kansas (23%).

However, other DB states, such as New York and Pennsylvania, reported lower turnover rates of 11%.

Among the states with defined contribution (DC) plans, Michigan reported a 13% turnover rate, while Oklahoma’s was slightly higher at 16%.

These variations show no clear pattern linking turnover rates to the presence of DB or DC retirement plans, suggesting that other factors may drive differences in employee retention.

Turnover rates declined nationally in 2023, including in Alaska, suggesting that broader labor market and economic conditions, rather than retirement plan design, most likely drove the volatility in Alaska’s turnover.

As illustrated in Figure 2, Alaska’s public employee turnover rate has generally mirrored national trends.

Alaska’s public employee turnover is better than the private sector.

Alaska’s turnover rate being on the lower end nationally is extraordinary, given the broader context of the state. However, merely comparing turnover rates between states does not provide a complete picture.

Alaska’s labor market operates under unique conditions that shape workforce trends across all industries. The state’s geographic isolation, extreme weather, and seasonal employment fluctuations lead to a particularly challenging labor market characterized by high turnover. According to the Bureau of Labor Statistics, Alaska consistently reports the highest overall workforce turnover rate (public and private sectors combined) in the nation.

To understand Alaska’s public employee turnover, a more meaningful comparison would be between the state’s public sector turnover and the state’s total turnover. In contrast to Alaska’s public employee turnover rate of 17.5% in 2022, Alaska’s total statewide workforce turnover, which includes both private and public sector employment, was 78%.

Public employee turnover is commonly lower than a state’s overall workforce turnover. However, among the states that publish turnover data, Alaska has the highest difference between its public employee turnover rate and the statewide turnover rate—meaning its public sector experiences the lowest turnover relative to the state’s overall workforce. This indicates a strength in Alaska’s public sector recruitment and retention capabilities compared to other employers in the state.

This figure suggests that Alaska’s public sector is unusually stable relative to its broader labor market, which experiences extremely high turnover. This relative stability contradicts claims of a public sector recruitment and retention crisis in Alaska.

If public sector jobs were highly unattractive, one would expect a smaller difference or even a higher public employee turnover rate relative to the general workforce and to other states.

Teacher turnover is lower than private sector, in line with the national average.

Teachers and other school district employees were also part of the transition to the defined contribution system in 2006. Over the past decade, Alaska’s education turnover has aligned with national public education turnover trends, which is, once again, surprising given the state’s generally high turnover rates.

Alaska’s teacher and principal turnover rates have stayed consistent with national trends, aligning with the U.S. public education average while being significantly lower than turnover in private-sector education.

The turnover rate in the Anchorage School District has consistently been lower than both state and national averages. This suggests that, as anticipated, rural and less central districts may experience higher turnover rates among school district employees, likely driving the average upward.

Why would retirement benefits impact turnover?

The academic literature overwhelmingly concluded that the kind of retirement benefit offered to public employees bears little impact on their decision to apply for or quit a job. Exit and entry surveys with public employees suggest the same: It’s not pensions driving decisions, but rather salary, work-life balance, and workplace conditions that are the main factors influencing job decisions.

Further evidence of the weak role of pensions in recruitment is that the kind of pension offered, defined benefit or defined contribution, or its generosity, such as multiplier and cost-of-living adjustments, is rarely mentioned in job listings. As of the time of writing this article, none of the job listings on governmentjobs.com for open roles with the state government of Alaska mention retirement benefits.

Alaska’s public employee turnover data does not indicate a crisis. In fact, the state’s public sector remains one of the most stable employment sectors in Alaska, with turnover rates that are significantly lower than both statewide and national private-sector averages and lower than most other states offering DB plans across the country. In context, Alaska’s public employee turnover rate might be among the best.

About the data used in this piece:

Because Alaska does not publicly release its public employee turnover data, this piece relied on data sent by the executive branch and the Alaska Anchorage School District upon request.

• Alaska’s public employee turnover: This dataset was provided by the executive branch to the Reason Foundation upon request. It covers key state agencies, including Health and Social Services, Corrections, Public Safety, and Transportation. This turnover reflects voluntary and involuntary separations, including resignations, retirements, and terminations. While the dataset excludes local government and school district employees, its broad agency coverage makes it the best currently available proxy for Alaska’s public workforce trends.

• Alaska’s teacher and principal turnover: Sourced from the Institute of Education Sciences 2021 update to its 2019 REL Northwest report.

• Alaska Anchorage School District’s turnover: This dataset was provided by the Anchorage School District upon request.

• National and statewide averages: Sourced from the Job Openings and Labor Turnover Survey (JOLTS) program of the Bureau of Labor Statistics (BLS). The series are not seasonally adjusted. Following BLS guidelines, monthly turnover rates within a year were summed to create yearly turnover rates.

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