How Do Women in the Public Sector Assess Their Retirement Security?

The public sector has long been seen as a reliable provider of retirement security. But a recent survey suggests that some younger workers—especially women—have significant concerns about their future financial health.

Published by the MissionSquare Research Institute, the survey data points to a gender gap in expected retirement security between male and female state and local public workers who are 35 or younger. When asked if they worried about being able to save enough for retirement, 44% of female respondents in this age bracket said they were very or extremely worried, compared with only 31% of male respondents.

In addition to having more concerns about retirement security, female respondents also reported lower levels of knowledge about their retirement benefits, including the types of plans they have access to and whether they are participating. Female respondents were also more likely than male respondents to report that they were not participating in retirement plans at all.

The nationally representative online survey of 1,004 state and local government employees age 35 or younger was conducted by Greenwald Research in March and April 2023.The results indicate that more emphasis may be needed to ensure that women in the public sector are informed about their retirement options and have the knowledge they need to make empowered decisions.

The retirement gender gap

Although it is impossible to know exactly what is behind these responses, there are several reasons why women tend to be less confident about their future retirement security. Across all sectors, women tend to face real challenges to planning how they will maintain their lifestyles after their working years. As the Women’s Institute for a Secure Retirement reports, these include longer life expectancies than men, lower earnings (women earn 21% less during their careers), more time off from the paid workforce for caretaking responsibilities (on average, women spend nine fewer years in paid employment), and being more likely to have part-time jobs (which makes plan participation less likely).

Overall, women in the United States are more likely to face retirement insecurity than men. Poverty rates among people age 65 and older are about 12% for women compared with about 9% for men. Women also save less for retirement while working and, once retired, receive about 80% of the income in retirement that men receive.

The general patterns hold for public sector workers as well. A 2022 study from the National Institute of Retirement Security found that a higher percentage of women than men were not on a path to meet their financial needs in retirement. For public sector workers in a typical defined benefit or traditional pension plan, 61% of women were found to have insufficient benefits to cover their expected needs in retirement compared with 52% of men.

The Pew Charitable Trusts measures retirement security in the public sector for both career workers and those who separate from service before reaching retirement eligibility. Career workers are generally well setup for retirement, but it’s more of mixed bag for those with gaps in service and for those who switch employers early or mid-career. Workers who separate after 5, 10, or 15 years into their career typically leave with inadequate savings for retirement—and this represents a significant portion of the public sector workforce.

The MissionSquare survey of workers 35 and under found that fewer than half currently plan to stay in public service until reaching retirement age. In addition, because women are more likely to leave the workforce for caregiving work, they are disproportionally likely to leave their jobs mid-career.

In addition to the quantitative measures of retirement security in the MissionSquare data, the survey results highlight the need for more employee education about available benefits and savings tools, especially for women. Pew’s retirement readiness framework can help policymakers understand the full picture of how well workers are prepared to meet their financial needs in retirement, including their access to supplemental savings plans, educational tools, and financial advisors.

Educational tools can help workers plan and track their progress. Personalized calculators that provide real-time information about predicted income in retirement as well as online resources such as workshops and webinars, educational materials on benefits, and informational videos are all great examples of helpful tools. Expanding their use can address general retirement savings challenges and can serve as a first step in reducing the gender retirement savings gap.

Final thoughts

Although most public sector retirement plans provide adequate retirement security for the average career worker, women are typically more at risk of financial challenges than men, largely because of longer lifespans and lower lifetime earnings. Women are also more likely to stray from the traditional career trajectories that are most rewarded by public plans.

These challenges also provide insight into why women are not only less confident about their chances of enjoying a secure retirement, but, in some cases, are actually falling behind on retirement savings goals. Targeted outreach by employers and retirement plans that makes use of educational tools and assess retirement readiness can potentially help to close the retirement gender gap.

Aleena Oberthur is a project director and Mollie Mills is a principal associate with The Pew Charitable Trusts' state fiscal policy project.