Half of public-sector employees in their 60s with defined contribution plans had less than $40,000 in their retirement savings account balances at the end of 2021, according to one of two new reports from the Public Retirement Research Lab, a collaborative effort of the Employee Benefit Research Institute and the National Association of Government Defined Contribution Administrators.

The reports, "The State of Public-Sector DC Plans: 2021" and "A Gender Lens on Public-Sector DC Savings Behaviors," focus on the specific challenges that public-sector employees with defined contribution plans face in their retirement saving efforts. While public-sector employees are more likely to have a defined benefit pension plan when compared to those in the private sector, DC plans are playing an increasingly larger role for those entering public sector employment and "understanding participant behavior in public-sector DC plans is critical to ensuring retirement security for participants," according to the PRRL.

A big-picture view

The analysis in "The State of Public Sector DC Plans" reflects data for 267 plans across 457(b), 401(a), 401(k), and 403(b) DC plans. The most common plan in the database studied is the 457(b) (63% of participants), which typically is used in the public sector as voluntary supplemental savings vehicles in conjunction with a DB pension, according to the PRRL. Meanwhile, 401(a) plans represent 20% of participants, non-ERISA 401(k) plans account for 16% and just 1% are in 403(b) plans.