The majority (81 per cent) of U.S. public sector employees worry whether they’ll have enough money to last them through retirement, according to a new survey by MissionSquare Research Institute.
The annual survey, conducted alongside the International Public Management Association for Human Resources and the National Association of State Personnel Executives, also found just 41 per cent of HR professionals in the public sector said they feel their employees are financially prepared for retirement.
It also found a quarter (26 per cent) of public sector workers said they’ve reduced their retirement savings since the start of the coronavirus pandemic. However, these employees reported higher combined employer and employee contribution rates to 401(k) or 403(b) retirement plans compared to private sector employees (15.7 per cent and 13 per cent, respectively).
Among public sector workers, more than half of single men (59.8 per cent) and single women (51.3 per cent) said their retirement plans are on track. Between 2010 and 2019, the median retirement wealth among men was $239,463, compared to $137,199 for women — a difference of 74.5 per cent.
In 2019, 37 per cent of state and local government employees had access to defined contribution pension plans at work, up from 31 per cent in 2012, according to the report that accompanied the survey. It also noted this shift from defined benefit to DC plans may have increased retirement savings inequality over time.
“It’s always going to be difficult for public employers to compete on salary, so they have to take full advantage of their strong benefits offerings to build financial security for the public service workforce,” said Lynne Ford, chief executive officer and president of MissionSquare Retirement, in a press release. “Traditional benefits like health care, pensions and supplemental retirement savings plans lay a strong long-horizon financial foundation for workers.”