February 2, 2017
A 2014 study by the TIAA-CREF Institute and the Center for State and Local Government Excellence showed that one fifth of all public sector employees are very confident and three fifths are somewhat confident that they will have enough money to live comfortably in retirement. But when you delve deeper, you might wonder on what basis this confidence is built.
Financial literacy, which is a bedrock of preparing for a secure retirement, varies greatly throughout the U.S. from state to state and also is affected by level of education. General interest in finances may be present, but it can translate to having savvy consumers and not long-term savers, often because people focus more on their immediate needs than on future needs in retirement.
With defined contribution plans available to most public sector workers, the goals for plan sponsors can be to:
Reaching these goals can help public employers attract and retain employees in the short term, encourage appropriate end-of-career turnover for the long term, and foster the growth of a retirement population that adds to rather than draws down the economic vitality of the local communities.
Cathie Eitelberg, Senior Vice President and Segal's National Public Sector Market Director (now retired), presented this topic at the 2016 NAGDCA Annual Conference. View a video of the Retirement Readiness presentation.
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