Insights & Education

Helping public sector workers achieve retirement readiness

Corebridge Financial’s survey of public sector employees points to actions employers and plan providers can take together to help improve retirement confidence and readiness.

For many years, defined benefit plans—also known as pension plans—have had a significant role in providing retirement income for workers in public service fields, such as education, healthcare, government and nonprofit. While they still exist for some, the landscape is changing—for these employees, relying on their own savings is taking lead in preparing for retirement.

To understand how workers in these fields are planning for and taking action to secure their financial future, Corebridge Financial fielded a survey on the topic of work and retirement. Key insights from the Corebridge Survey of Public Sector Employees shed light on how happy public service workers are in their jobs and what incents them to stay where they are—or move on—and to what degree they have thought about and planned for their retirement. This includes:

Top financial priorities and stressors
Retirement expectations—and the planning disconnect
Plan features that can improve retirement readiness
What drives current savings rates
The appeal of guaranteed retirement income and need for guidance

Happiness at work

How do public sector employees feel about their jobs and where they work? And how do they prioritize what they need from an employer?

Here is what we learned:

80% of workers are happy with their jobs. 38% are very happy. Three in four (73%) say they are happy with their employer.
While less than 10% say they want a job change, 43% are casually looking or are open to the right opportunity.
Primary drivers for a job or career change are higher pay, better retirement benefits, and job flexibility.

Navigating competing priorities

Overall, workers say their retirement is top of mind—planning and saving for—but for those with student loan debt, paying off their loans is equally important.

Having an emergency fund and paying down credit card debt round out the top five financial priorities for public sector workers.

Top financial priorities

Saving for retirement: 88%
Paying off student loans*: 88%
Planning for retirement: 84%
Start or grow an emergency fund: 80%
Paying off credit card debt: 66%

_{Selected as highest, high or moderate priority

*Among the approximately 30% of respondents with student loan debt.}

Addressing retirement planning uncertainties

Although survey findings reveal a reliance on retirement savings plans—73% plan to fund their retirement with one—only 1 in 4 have clearly defined goals on how much they will need. Workers might also be underestimating how long they will spend in retirement.

Employee expectations need to align with action

73% plan to fund retirement through their retirement savings plan.
Only 1 in 4 have clearly defined goals on how much they will need.
Less than half (41%) say they are on track. For women, this drops to 35%.

Workers are underestimating years in retirement

More than half (57%) think they will spend 20 years or less in retirement.
One in four (25%) earning up to $50,000 expect retirement to be 10 years or less.
Only high earners ($ 100k+) estimate 20+ years in retirement.

These figures underscore an urgent need for more planning. While the future is unpredictable, it is possible to help workers model the probabilities and develop an action plan they can work toward to achieve greater confidence and increase the likelihood that they will be prepared for a long and enjoyable retirement.

Guaranteed lifetime income has appeal, but guidance is needed

More than 90% of workers find the idea of having an annuity that provides lifetime income in retirement appealing, with half saying it would be very appealing.
Three in four (74%) say they are likely to choose an annuity if offered as an investment option in their employer plan.
The appeal of annuities is highest among Millennial and GenX workers, who now comprise the bulk of the workforce. This may reflect a desire among people in their 30s to 50s to seek greater certainty in retirement planning as they balance competing financial priorities.

Annuities are long-term products designed for retirement.

Action today can lead to great things tomorrow

Working with a financial professional could improve confidence and plan understanding:

Only half (54%) of employees know the maximum amount they can contribute to their retirement savings plan.
Only 38% understand the difference between a defined benefit plan and defined contribution plan—this jumps to 46% of those who work with a financial professional.

Professional guidance could help improve plan understanding and engagement and instill greater confidence. In fact, even though 77% of public sector workers surveyed said they don’t work with a financial professional, the impact of advice is clear: of those who do, more than three out of four (78%) say doing so has made them more confident in their ability to retire.

Download the full paper

Read the press release

At Corebridge, we believe that great things can happen when people take action. Action is everything.

We’re committed to helping public sector workers actively plan and prepare for retirement through the resources, tools and solutions we offer—and through the financial professionals and institutions we proudly partner with.