Report Shows Need for State and Local Government Employers to Address Workers’ Financial Insecurity

By Employers Council Staff posted 03-10-2023 08:59 AM

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A recent report found that many public-sector employees do not feel financially secure, despite generally having a wider array of benefits and more money saved for retirement than workers in the private sector. The report, Examining the Financial Wellbeing of the U.S. Public Service Workforce, was released in February by MissionSquare Research Institute, a Washington-D.C.-based nonpartisan, not-for-profit organization.

Some of the report’s key findings include the following:

Roughly one in seven households with a public-sector employee reported being unable to pay all their bills.

The combined employer and employee contribution rates for defined contribution plans, such as a 401(k), were higher for public-sector employees (15.7%) than for those in the private sector (13%).
Even with the higher contribution rates mentioned above, more than 80% of public employees are concerned about having enough money to last them through retirement.

Recent economic downturns have trimmed wages and retirement benefits for some in the public sector, and private businesses have become more competitive in what they can offer employees. With many employers instituting an employee wellness program, it may be time to focus on financial wellness for the public-sector workforce. While this may not seem obvious due to the history of strong retirement and other benefits, addressing employee financial insecurity is one way to keep good employees and help them focus on their work rather than worry about their finances.

The Consumer Financial Protection Bureau provides free tools to employers to help the financial wellbeing of their employees. You might also consider reaching out to an investment firm. Some do basic financial presentations in exchange for being able to talk to interested employees privately.

Government employers can work with Employers Council to review benefit plans and survey employees about desired benefits. If you have any questions, please contact our Member Experience Team.