An increasing number of American workers, many of them local government employees, will not be financially prepared for retirement.
According to a whitepaper, prepared for the National Association of Government Defined Contributing Administrators (NAGDCA) by the International Foundation for Retirement Education, several statistics indicate America is on the verge of a retirement crisis. Consider:
- 57 percent of workers report the total value of their household’s savings and investments, excluding the value of their primary homes and any defined benefit plans, is less than $25,000.
- Only 13 percent of workers say they are “very confident” they will have enough money to live comfortably after retirement.
- About 46 percent of unmarried elderly persons rely on Social Security for 90 percent or more of their income.
- More than 75 percent of plan sponsors say most of their participants will have to work during their retirement.
Public sector employees are included in these numbers. “The combination of changing benefits, retirees that are living longer and increases in medical expenses mean that public sector employers are facing a significant challenge to ensure employees recognize their new retirement readiness responsibilities,” writes Ralph Marsh, NAGDCA president, in the whitepaper.
And while public sector employers must ensure benefits packages remain attractive to new, skilled workers, they must also make sure new employees understand a benefit package alone will likely not be sufficient to meet all future retirement needs, according to County News, the newsletter for the.
Ways by which public employers and retirement plan providers can help employees prepare for the future are threefold, according to the whitepaper.
- By offering personalized retirement assessment tools to measure the complete picture of an employee’s retirement readiness
- Expanding educational programs to address planning needs, including the differences between gender, ethnicity and generation
- Encouraging employee participation in voluntary robust savings plans
As public employees are becoming increasingly responsible for their own retirements, employers must help them understand and gauge personal retirement readiness as well as help them take action should their projected outcomes look bleak, according to County News.
For more information on changes to public employee benefits, check out American City & County’s coverage of the topic.