Employees working in the public sector have 23% less money in defined contribution plans than corporate workers, according to a Fidelity Investments survey.
The results showed that although both sectors had similar average compensation levels, public employees have saved an average of $48,000 in their defined contribution plans, compared with $62,000 on average for corporate employees.
Also, 57% of those public employees with access to defined benefit plans worry that those benefits will be reduced or frozen in the future, the study found. However, only 38% of those with access to DB plans said they plan to increase their 401(k) contributions to compensate.
About 67% of public employees think automatic increase options that boost their savings rate annually would be helpful.
"This study proves that access to workplace benefits alone does not help to create financial security unless participants are actively engaged in saving and investing in their plan," John Begley, an executive vice president with Fidelity Employer Services, a division of Fidelity Investments, said in a report on the survey's results. "Employers can help employees turn inertia to their advantage by adopting automatic solutions."
Fidelity surveyed 1,521 defined contribution plan participants in April and May.