In the most recent report released by GovWin+Onvia, 10 Hotspots in Government Contracting for 2018, our SLED Market Analysis team studied data from our unmatched government market intelligence database. One of the key findings from that report revealed that state, local and education (SLED) government agencies are spending more money on funding pensions.
The issue of public sector pensions and retirement planning is one that has been on the minds of state and local government agencies for years, but only recently has seemed to reach a level of importance that has spurred action. We’ve found that bids and RFPs for funding pensions have grown by 22% over the last year – which makes it our 8th-ranked hotspot for 2018.
A Greater Need for Defined Contribution, 401K Plans, and Better Pensions
Last year, Forbes released an article stating that the “crisis” of more retiring government workers – sometimes referred to as the “Silver Tsunami” – is one that has not been adequately addressed by many state and local government agencies, who might not yet see this as a huge problem.
[Agencies] hope… liabilities can be reduced and pensions salvaged. Unfortunately, this is wishful thinking at best. Even though the facts are on the table, state and local governments continue to underestimate the crisis at hand.Olivier Garret, CEO of Mauldin Economics and Garret/Galland Research in Forbes
Studies have suggested that as pension costs have begun “consuming state and local budgets,” some agencies have been shifting this problem to the future by setting aside the minimum amounts for pensions for government employees, banking on being able to catch up later.
Our analysis has found that this trend is beginning to change. Agencies are starting to look for a better “deal” on pension returns and defined contribution plans, and by reducing their long-term liabilities by restricting pensions to only certain classes of new hires. As agencies take these actions to try and offer improved retirement plans while still being budget-conscious, the demand for financial firms to help provide some of these services has grown.
Where to Find Government Bids and RFPs for Funding Pensions
Data taken from the industry-leading GovWin+Onvia platform, the most comprehensive source of government spending market intelligence, shows some intriguing trends on where these kinds of government contracting opportunities are found. While there are plenty of bids and RFPs in all states, a full 30% of those come from two areas – Massachusetts and California.
To illustrate the kinds of opportunities that are arising in this market, we found examples of bids and RFPs from those two states related to funding pensions that were recently surfaced in the GovWin+Onvia market intelligence platform.
- Defined Contribution – Massachusetts Bay Transportation Authority, MA
The Massachusetts Bay Transportation Authority recently released a bid for providing financial and business services including a defined contribution plan.
- Pension Administration System – County of Contra Costa, CA
GovWin+Onvia found that Contra Costa County may have a requirement for a Pension Administration System, and the contract may approach an estimated $1M.
Learn About the Other 2018 Hotspots in SLED Government Contracting
Financial services bids and RFPs in areas like funding pensions are just one of the many growth areas in state and local government contracting. Our report highlighted nine other hotspots with high year-over-year growth rates and what the key factors were that drove those changes.
To download “10 Hotspots in Government Contracting for 2018”, click the link below and you’ll receive a complimentary copy of our report that will inform you about the fastest-growing areas in the dynamic public sector contracting marketplace – and give you actionable insights to help your firm get ahead of the game.