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Office of the State Auditor: State Wages and Benefits are Misaligned

Salt Lake City – The Office of the State Auditor released a Total Compensation Study for the State of Utah for fiscal year 2017. The study found that, in general, state employees are competitively compensated compared with private sector employees, but identifies a significant misalignment between wages and benefits. In other words, state employees receive wages that are generally below market but receive benefits that are significantly above market.

The State Auditor contracted with Gallagher Benefit Services, Inc. (GBS) to conduct a total compensation study for fiscal year 2017. The GBS study compares compensation for an array of positions within state government employment with similar positions in Utah’s private sector market. This study excludes comparisons with other governmental entities within Utah.

The GBS study reports that the average employee within the state’s Tier 1 retirement program (Tier 1 employees), typically longer-tenure employees, received compensation that was 8.93 percent above Utah’s private market median. The average employee within the state’s Tier 2 retirement program (Tier 2 employees), typically short-term tenure employees, received compensation that was 6.34 percent above market.

The GBS study reported the possible misalignment of base salaries, which were, on average, 12.28 percent below the Utah private sector market. Total benefits compared in the study were also misaligned. For Tier 1 employees, analyzed employer benefit costs were 88.89 percent above the market median, while for Tier 2 employees, those benefit costs were 76.35 percent above the market. Benefits studied include health insurance, retirement benefits, short-term and long-term disability insurance and life insurance.

The study and a PDF of the summary data may be found on the State Auditor’s website.