The State of Public-Sector DC Plans: 2022

In this study, public-sector defined contribution (DC) plan participant savings behaviors are analyzed. Specifically, balances, contributions, loan usage, and asset allocation by participants’ age and tenure are examined. Some of the key findings include:

Account Balances

The average account balance for public-sector DC plan participants increased with age and tenure. For instance, the average account balance for participants in their 40s with zero to two years of tenure was $5,476, compared with $63,105 among those with 11 to 20 years of tenure in the same age group.
The median account balance ranged from $1,618 for those in their 20s to $31,055 for those in their 60s.

Contributions

The average employee contribution amount for those in their 40s was $4,125 per year, while the median contribution was $1,828.
The average employee contribution rate (employee contributions divided by salary) was 6.4 percent. This rate increased with age, from 3.6 percent for those in their 20s to 7.6 percent for participants in their 50s, before decreasing to 8.4 percent for those in their 60s.

Loan Usage

Among participants with access to plan loans, the percentage of those who take loans from their plans by age was hump-shaped, going from 3.1 percent of participants in their 20s to 18.6 percent of participants in their 40s and 50s, and decreasing to 11 percent of participants in their 60s.
Participants in their 50s had the highest average outstanding loan balance of $9,769, but they also had the second lowest loan as a percentage of the total account balance of 19.6 percent.

Asset Allocation

Participants in their 20s had the largest allocations to target-date funds (66.5 percent).
Allocations to bond funds and money market/stable-value funds increased with age, reaching 7.8 percent and 24.2 percent, respectively, for participants in their 60s, compared with 3.3 percent and 1.8 percent for those in their 20s.

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Figure 19, Asset-Weighted Allocations, by Age ................................................................................................ 14 Mean Account Balance, by Age and Tenure — 457(b) Plans Mean Account Balance, by Age and Tenure — 401(k) Plans PRRL Database UniverseP AA e ss srce e se t-n tW -tW aege ie gig hof h te te d Pd PaAarA ltrllitoca lci ioca cipa pa titn on inon ts ts ,s A W g by tie o th s ,B A ag a by e lLoa a n — Pce ln a n d O P rTy F uiu vtpe s a nttds a en ,4 di by 0n1 g ( A , k) gby e P aA la ngn d es The Public Retirement Research Lab is a retirement-industry-sponsored collaborative effort of the Employee Benefit Research Institute (EBRI) and the National Association F E Th Th im ge e ure p f P lo o R 2 ur m yR eA L e s w d D aija sp ot o r a lrki a a bsse y a n s sg e t i th ca c n e t a pe tt h e ee g g rce pub o ori rin z ee ts i la is e c se g n e t a s o ch h ct ef o i d pa n r a v fa t e ra ce tst ise ci m a p t ( co e ae n nq t t m o s by ui p p tlitie ic pl o s, an t bo a e in n dt n r to d y e o p s, tie n re Par m ,e wh m t o o icip e n f ant n e i27 lt y e s F l, m a se bin y g a d p ure E rke nt sc ait ra a y t 2 /s p t Te y B e t p ca a .e sh b Pl tub e o e- ws t g v lo ia cr- liue e se hs. e ct Th pe fun or rce e dse s, n a tn ad g e 1 percent and 1.8 percent for those in their 20s. Figure 5 The prior reports, “The State of Public Sector DC Plans: A First Look at the PRRL Database” and “The State of Public Figur $1e 60,000 20, Asset-Weighted Allocations, by Age — Private $9 4 00 ,001 0 (k) Plans ...................................................... 15 3 of Government Defined Contribution Administrators (NAGDCA). The PRRL analyzesP da lan ta Ty frpe om its Public Retirement Research Database, the first-ever database specific to The State of Public-Sector D 18C .6% Plans: 2 180 .6%22 o e g ta m f ra a rg p n sse e lul o t- y a d te r s by a e ca ts eta f pl ere un ga o l d n ri ike s) t es i y la y p rn t e eclud o . bro h Th ae k v ee ,e m f n o a o o r de st ut ex co f by a in m e m pl d pm be le ao ,n i n n t n e y t vy fp e ip t e st ( e iDB) m o n F e f n p i pe g tl o ure an n p i si t s 22 n io o t n n h s f pl e – 2 P o a 6 cu R n. P a R se L D n ad d rt o ibe a cn itp a do a o bn fa ft m s e s e re ed i n wa s 401( t im c, s ul p th ub ta e ip ) 457( pl llie cly a dn e t b s a fra i)n pl d l ele d o a d ca n , ted 20%70% 35% 90% 83.4% Figure 14 Figure 15 Sector DC Plans: 2021,” can be fouM ned a na a t nh d tt M p e:dia //w n w Accou w.p nrrl t B.ao larg nce /re , by seAg arc e fh or . All Plan Types Combined FFig iguurree 172 $80,000 30% $140,000 public-sector defined contribution data, to produce unbiased, actionable research aimed at enhancing understanding of the design and utilization of public-sector defined Figure 21, Asset-Weighted Allocations, by Tenure ........................................................................................... 15 60% wi sma con si18% gtn h til 25% ri 6 fli co b ca 2 ut n p m it o el p n rce ya ( f n DC e n iwe e ts ( o ) r f p i p .a l e a sse a .,n rt “ s. sma it ci S s t p oa o m ll n s ca e tt s p g op cks o s” a v 35% rt e ) a irn a ci n n p m d d a bo e t on it n t h n g e e d ir m s t n i n p a h v l o a 457( ey n st e pa m rs b e rt o )n pl ifci tf o e p a r p a nDC t n a io tn s n i d p s suc n l60 a o nts i h p h e e n a r rc a pl s r e “ n a e h t n a y o t lb f y e r t p ist d o e ” a ts a st a te l a i ruct nn sse dv a e ur lt sls com t o e m ,ca co etn e n tid t si n rus g m st o in tre s g CONTENTS Mean and Median Total Contributions, by Age 80% Mean and Median Total Contribution Rate, by Age By Samita Thephasit, Employee Benefit Research Institute, on behalf of the Public Retirement $70,000 2 Mean Acco Mu ea nn t B aa nld anM cee,di by an AEmpl ge aoy nd eTe e Con nure tr i — butiP on riv s,a tby e 4A0 g1 e(k) Plans $120,000 20% The comb $1i00 ne ,00 d0 percentage of participants by entity type exceeded 100 percent, as many individuals participated in contribution retirement plans to better inform public plan design, management, innovation, and legislation. To learn more, visit www.prrl.org. 30% 16%50% o f (R ro f m E m ITs) a 457( nd o ar tb o fun ) ry pl 401( da s i ns. nv 457( ae ) p stle ad b n st )s a pl rin a ct n dls a /or y in sup re i t ny fp lp a lit e ca im ol n l ey -n p use tro alt 457( e dct in e t d b h t )e pl r pub ea asur ns. liy Th c s bo e ect n P d oub s i r al ssu s v ic R o ee l d un t by ire ta m trh y ee sup n f t R ed p e e l sr e e a m a l rch ent La al b to b Fa 15% igur lane ce2 d 2 ,a Ass nd t ea t-rg We eight t-dat e e d f un Alloca ds otv ion era s ltlo . Equi 70%ty, by Age a $6n 0,00 d 0 Plan Type ................................................... 16 25% Research Lab $6,000 $7,000 10.0% $100,000 multInt iplreod pla uc nst iton hat ................................ belong to different e ................................ ntity types. For insta................................ nce, an employee ma ................................ y participate in a prima ................................ ry plan offered by. 4 a 25% 10% $350,000 9 40% $50,000 14% 40% $80,000 60% 9.0% g sa (P oR v viR e nrn L) wa gs v me en h s cre ti.cl Th es a t e ie n ca d co spe te ng jun o ciri fct ie cs a ia oln ly r wi e t a ot g h ag a dre d DB re ga ss t p tee d h n ie si n f to o ra n si ,g tm x h co o eug nre te h d a t l sse h a is i nt d cl s n sca a o ss p t a e e s: la wa n e dq y pre ui s t ty h se ;e b ca no tn r sd e e;l. i m ab oln ee d ya m taa o rk ne DC t or 5% 20% Figure 23, Asse $5 t- ,00 W 0eighted Allocations to Bonds, by Age and Plan Type ................................................... 16 state whi$8 le 0 ,00 a0 lso participating in a supplemental plan provided by their municipality. $300,000 $6,000 SimM il0% a et r ho to wh dolog at ca y ................................ n be observed11 in .0% ................................ Figure 19, alloca................................ tion to equity fun................................ ds increased with.............................. ag 11 e. 0% and slightly 5 $40,000 8.0% 30% 12% 15% 50% re sta tib re le m $- 25 e v 0a n ,0l 0 tu 0 pl e a fun ns cov ds; te ari rg ne gt pub -datle ic f-un sed ct so ; r be am lap nc lo ey de fe un s. d Th s ( ee da .g.t , a m c ut olua lec l f te un d by ds wi PR tR h L a f aire xe con d altla oic na etd io in n t to h e $60,000 401(a) 401(k) 403(b) 457(b) $4,000 3 $60,000 SUMMARY 7.0% Figure 24, Ass $5,00 e 0t-Weighted Allocations to Money and Stab $30le ,000Value, by Age and Plan Type ................ 16 Figures 2A and 2B and other figures that break down statistics by plan type exclude a small number of plans and O de ncre e-fa ifse thd o a f m tho en tg o pa tal ra tisse cipa ts nt in s i tn h e t10% h P eR ir R 60s L D a atcr ab oa ss a se lwe l pl ra en i t nv ye ps ets e edx ice n 401( pt foa r )403( planb s, ). A wim tho 32 ng wh perce ichn 81. t of5 Tot $2 a 00 l ,Ass 000 ets .................................................................................................................................................................. 7 Tha 20% nks to PRRL Partners: 10% 40% P eq Rui Rt L D ies a atn ad b bo asen . ds that does not change over time); and “other” inv 6.0% estments, which refers to in-plan $40,000 20s 13.8% 13.9% 3.8% 12.1% $3,000 $20,000 particip $1 a50 nt,00 s w 0 ho hav 20% e public-sector, emp5% loyer-provided IRAs. The combined percentage of participants by plan type $4,000 p pe arce rt Fiic gur n ip ta e wa n $4t 2 0,000 s p 5 s , a Ass a ll rt oie c ci a t- p tW e ad t eight i n to g i en e q t d ui h Al te ym l f oca un . No d tis a n on -E m s R to o IS n Tg A a pa 401( rge rt t- ic D k) ip a pl a te na tF n s und s r in t esh p , e rb e iy r se 20s Age nted , d a e a nd cr ro e un Pa la sd in n 19 g Ty t p o p e e 47. ............................ rce 1 n t p e orce f thn et tota 16 l 10% 5.0% 8% 30% Account Balance by Plan Type .............................................................................................................................. 9 In this study, public-sector defined contribution (DC) plan participant savings behaviors are analyzed. $20,000 annui t $1 ie 00s, ,00 R 0 EITs, and investments t 0% hat cannot be classified.$1 0,000 F eou xc ne die ng d s P 30s a 1 rtn 0e0 rs : percen t$2 , 25 a ,00 s .2% 0many individuals particip23 at.e 3% d in more than one plan t 17 y.p 3% e. 23.6% 4.0% 1 20s 30s 40s 50s 60s 0% 15% a a Th sse mio s i n ts t s g pa in h t ert h te ih ci P ird p $3 R a , 00 e R n0d t L D s itiin o a t n t o a hb e f t ia r s h 60s. e e, wi St Th a tt he i25 o s coul f P pe ub rc dl be e ic n -tS due o efct p t o ar o rt D t ici h Ce p P a sm ln atn s p as r ll a n ert umbe pio ci rp t ba ar t in o sf g e 403( d in o t nh t b eh )m pl e P . Ia tR n 'sR s wor L D prea t se h ta n nb to e atd se in ig .n $50,000 20% 6% Figure 2 $06, Asset-Weighted Allocations to Balanced Funds, b $0y Age and Plan Type ................................. 17 Specifica$2 ll0,000 y, balances, contributions, loan usage, and asset allocation by participants’ age and tenure Loan Use..................................................................................................................................................................... 12 3.0% 4 Equit y$1,000 Bond Stable Value Target Date Balanced Other Capital Grou 40s p|American Funds24 .2% 24.3% 24.4% 24.1% 20s 30s 40s 50s 60s 20s 30s 40s 50s 60s In this stu $- dy, te3.1% nure information is defined as both the number of years an emp 6.l9% oyee has worked at their current job 6.2% 401(a) 9.8% 15.5% 31.5% 30.9% 30.7% t Th F th h ig a e e ure da t 401( an 19 ta al.y k si p ) pl ro s rv a ein f d ls i e es ct n ts d t hh is e a pub a ta g f go re lr ic se g two ate cd t h o v un r ie d d w o ire ffe drf f p se ro ub vm eln t ic th - ye se -ifr o ct p ur o ri r v 457( DC ate da -b se ),t 401( ct a f oo r co r a t) h un , 401( ose te pl rpk) a a 3.rt ,n 9% a s s pa nid n 403( trh tia ci tp t b a h )te iDC n yg a i rp n el t ah ne s; $2,000 10% 4% 2.0% are examined. Some o 20s f the key findings i 30snclude: 40s 50s 60s Ass 20s et< Al 3 loca $1t,i 9on 06 $- ................................ $3,802 $5,433 ................................ $9,161 $15,219 ................................ < 3 $3,051 ................................ $4,796 $6,949 $1 ........................ 0,214 $9,750 14 (tenure with an e27 m.p 5% loyer) and the n2.4% umber of years an 2.2% employee has part 65 ic.i6% pated in the plan 1.7% (tenure with the p0. la 5% n). If 50s $0 22.9% 24.9% 29.8% 24.8% Invesco 1.0% 401(k) 0.1% 0.4% 1.1% 1.8% 2.9% o Pv Re R r L 3 Da mitla lib oa ns st e. aY te o,un co g un er tp y,a ci rtt i20s ci y,p a an nd t sub s had d iv ai h siio 30s g 0% n h g er ocon vern ce m ne tn ra t t 40s e io m np o lo f y th ee eis; r a asse nd50s $1 ts a 6 ll 8 o ca biltle io dn to in 60s a tasse rgetts - as legacy accounts; only those established prior to 1986 continue to operate. 2% 20s 30s 40s 50s 60s $1,000 0 –2 3-7 Yea yerasr $6,434 $5,7 $1800 ,748 $13,332 $1 $71 ,45 2,3633 $21,449 $20,9663-7 year $10,381 $3 $104,,5 85 705 $19,477 $26,85 $4 56,609 $28,319 information on tenure with an employer was missing, tenure with the plan was used. Tenure information under either 0.0% 30s 35.1% City County Othe3.6% r State 3.1% 55.6% 1.9% 0.7% Conclusion ................................................................................................................................................................. 17 60s 13.9% 13.6% 24.7% 15.4% Nationwide City County Other State Account Balances 403(b) 3.8% 3.9% 5.2% 6.0% 4.8% 20s 30s 40s 50s 60s o df a y te e a fun r- Me e d an ns. d Em F 202 plo o ye r e iCo n 2 nst .t Th ribu atn ioince s pu , 66. bli5 ca $1 p t ,82 e io 8 rce n se ntr o ve f t s o ats a$3 l a a n ,26 sse upd 2 ts b ate e, but long n i$4 no ,g 12 t t a 5o co pa m rtp ic air p iso an$5 n ts ,,17 to i9 n t th he e pr ir 20s evio we us e $5,42 re 9d iin ti on, 0% Figure 22 Figure 23 Mea 7-17 n B yaela arnce $7,941 $4 $22,80 ,880 0 $39,547 $56,$1 0266,789 $71,372 $40,688 7-17 year $11,346 $7 $2 3,013 3,173 $34,117 $48$9 ,752,018 2 $53,124 definition was only $- available for 62.5 percent of participants. 3 –5 Years $13,424 $24,921 $37,959 $51,097 $59,616 40s 43.2% 5.4% 5.1% 42.9% 2.3% 1.1% Finally, a small number of 403(b) plans were represented in the PRRL Database, making up 2 percent About PRRL ................................ 20s 30s ................................ 40s 50s 60s ................................................................................................ 18 457(b) 0.7% 1.5% 2.7% 3.3% 4.3% 17+ year 20s 30s 40s Mea 17+n y eTaortal Contribution50s 60s t aa nrg ale ytz-id ng at con e fun trid bs. u Th tion a $3 s, t7 n , l 400o umbe an a $80ct r ,93f i 2v eiltly t, $1 o a 30,214 ss 17. e4 t a p $1l4e l1,801 o rce cat nit o a n,m ao nn dg a pa cco rtun icit p ba ant la s n in ce $4 t 4s a ,h 549eis r o 60s. f $5 y 8,75 e 1 a r-e $7 n 6,d 78 202 9 $8 2 0. ,39 8 Me Ass dieatn- W Em eplo igh ytee ed Co Anlltoca ributtiio on n s to Equity$840 , by Age and Plan Type$1,797 Asse $2t,-20 W0 eighted Allocations t$2 o ,B 53 on 1ds, by Age and Pla$2 n ,Ty 47pe 5 Median Balance $1,618 $6,684 $13,739 $23,551 $31,055 5 6 –10 Years $21,158 $42,907 $64,906 $8 3.2,842 8% 5.8% 6.7% $8 8.2 7,847 % 9.2% Salary information was available for 35 percent of participants in this study. Accordingly, Figures 13 and 15 are limited to • The average account balance for public-sector DC plan participants increased with age and of tota 50s l assets 45 a.1% nd having 2 pe 7.6% rcent of individ8.9% uals participatin 34g .3% in these plans. 2.6% 403(b) plans a 1.4% re often Mean Total Contribution $2,317 $3,967 $4,816 $5,814 $6,017 Percentage Thanks to PRRL Partners:.......................................................................................................................................... 18 this subsa90% mple of participants. 20% 11 –20 Years $68,003 $114,961 $141,914 $135,768 TOTAtL e A nure SS . F Eo TS r in stance, the average account balance for participants in their 40s with zero to two METHODOLOGY M Th use ee a d o n by wh v 60s e pub ra ile ll, co t lih c e 39 m e t .6% p d ro e uc s nia d tit r o io e nn v o a eflrse i tn hst e s f 10 pa i.1% to ur r tt ia o ici ss np s ( ea tt s h in ia g g lh l pl o eca 13 r a .e 2% n td e s i uc d s i ta o tl ilb o ust o nn o rd a r f tK e un 32 – d .12) 0% i dn s a F a in g nd ure d st ho 1 asp b A le i.t A - 3.5% a vlla s. th l A ue oug l fa un h rg t d e h s. p e F n erce o umbe 1. r 6% in nt st ar g ao n e o f ce f, Median Total Figure 10 Median Total Figure 11 80% Th e average amount of the outstanding loan balances is shown in Figure 17 and exhibits an increasing The findings are furth $e 1,r 00b 7 ro $k 2,e 23n 6 do $2,wn 600 in $2 F ,90i3gure $2,8 6 00 to show the average acc 1o .2% unt b 3.0a %lance 3.7% by b 4.o 4%th a4g .7e % and 6 70% 21 –30 Years $164,865 $234,865 $212,690 Loan iny fo e Corma a ntrrs ibuttioo io nfn t w en as ure ava w ilaa bs le$ fo 5, r 476 34 p,e com rcentp oa f re pad rt wi icipt ah n t$ s 63, in th 105 e da C15% ota na trm b ibut ao is one n P.g erc t enh tage ose with 11 to 20 years of tenure Mean Account Balance, by Age and Tenure — 401(a) Plans Mean Account Balance, by Age and Tenure — 403(b) Plans o p gn ub ol vy e l irn 1. c-8 m se p e ct e no rce ts i r NDC on n te:t clud E xo ca lufdsse t ese o pad rt tt ica ipa s a il n n a t t s r w sse h e hoi h s da did n te s be ol t d mta i a ke n s l ao e 403( con t nt rg ibu m itn ioa ng b y in t ) s 20 p o 22 el e .p am n as, rt sm o icifp a fe a llr n co in ts g m i a np t si a hre g en id r if 20s w wi icatn ht ta h ere e re a t h a fo lo lusa o r ca po n tte d e d s o n t tio a f s ls g tta a ro b te lwt e a -n h va d iln l u o e tca h el 60% pattern 4 until age 60. For instance, the average outstanding loan amount was $3,968 among While knowledge of the use of different DC plan types in the public sector is critical to plan To demonstrate the complexity of public-sector DC plan system structures, this study of the PRRL tenure. As would be expected, account balances increased with both age and tenure. For example, FIGURES 31+ 50% Years 7 in the same age group. $282,992 $312,092 P f gun o Rv R d eL D s, rn but m ae ta t nb t h a e es n n e tumbe .i ties ar cro incre ss t ah se e U s tn oi t24. ed S 2 tp ae te rc s, e i ntt a is i m m op no gr pa tan rt t t ico ip ra en cog ts in ni ze the tih r a 60s. t ma A ny sse stt a t ae ll p oca lan tis a on t cto a s Th Th ee r ce asult l$1 cu 40,000 las tio in n F fo ig r ture he p 21, erce wh ntag ich e o a f p re art o ic rg ipa an ntis z e wd it h b o yu tte stn aure ndin , pro g lo $1 a 10% 2v n 0,000 is d b ey si ag m ei l ea xc r liu n dsi ed g h altls p . a P rta ic rt ipici anp ts a n wt h s wi o dot n ho t participa 40% nts in their 20s, which increased to $9,769 for those in their 50s and decreased to $9,276 for administrators, looking at each plan separately does not show the amount that public-sector DC plan Database examines four distinct categories of DC plan use: account balances, contributions, loans, and participants in their 40s with two years of tenure or less had an average account balance of $5,476; Figure 13 CONCLUSION • Th 30% e median account balance ranged from $1,618 for those in their 20s to $31,055 for those in belong to plans that provided loan information. For the 2021 cross-sectional analysis, this calculation includes all Figure 1A, PRRL Database Universe ....................................................................................................................... 5 t f ee h qwe e ui pri tr y f y m e un a ary rs o ds i DC n f cre t v en ea ure hs icl ed e a wi f llo or t ca l ho t a we eg de a r but - h leig v d e he le g cre r o con v ae sr c e n e d m n a te ra m nt t os wi in og n pa o th f t rt in h i t ci eh ip r e a a ir n ss t ss e ta t in s te t is. n ht Wh e o ir t60s. airg lee t th -e dse at s e f ta un ted p s,l wh ans m ile ake $120,000 $105% 0,000 those in t 20% heir 60s. The average loan amount as a percentage of account balance in Figure 18 was participants have in total. In the PRRL Database, 41 percent of participants had money in more than asset allocation. Using these measures, the data are analyzed using two different methods. Mean and Median Employee Contributions as a Percentage of Salary, by Age participants of the same ages with tenures of 11 to 20 years had an average balance of $63,105. participants. th 10% eir 60s. up only 25 percent of all plans in the PRRL Database, a single state plan can encompass many particip$1 a 0n 0,000 ts with more years of tenure allocated more of their assets into stable-v 8alue, balanced, and Figure 2B Figure 1B, Participants, byFig Eu nt re it2yA Type .................................................................................................................... 5 Th LO is e AN US ditionE o f the State of Public-Sector DC Plans provides a better understanding of what public- higher for younger participants (reflecting their lower average account balances). Only 3.1 percent of 0% 0% one plan type (for an average of 1.2 plans per participant). ( $8F 0,i 00 g 0ure 4). 9.0% A 8 CCOUNT BALANCE BY PLAN TYPE 20s 30s 40s 50s 60s 20s 30s 40s 50s 60s To clarify, the vertical axis of Figure 18 is defined as the outstanding loan balance (in dollars), divided by the total balance e se Oq n p ui ea m tra y f e te un th e o d m d sp . o lf o a ye nrs. aly sis, consistent with the National Association of Government Defined Contribution $80,000 Figure 19 Assets, by Plan Type sector DC plan participants have in their current employer’s plans, since account balances are the 20s age cohort had Par at l ico ipa ant ns, but , by Pl f an or Tytph eose who did, the balance equaled 24.9 percent of their DC Figure 2A, Participants, by Plan Type ..................................................................................................................... 6 Contributions 6 8.0% $60,000 Figure 6 ( Th in d eo use llars o ) if n l to ha e n ps i artn ic pub ipantl ’s ic a -c se coct uno t.r In DC div pl idua an lss i ws ith sh ouo t wn any i o n u F tsitg an ure dins 16 g loa– n18. bala n O ce ff w er eire ng e l xc ola un ds i ed s o from ptt io he n al for 401(a) 3.9% 7.9% 14.8% 19.6% 16.5% 401(a) 0.2% 0.7% 1.4% 2.6% 3.2% Administrators’ (NAGDCA’s) past effortsA t ssh etro -We ug ighh te i d t As A llocatn ion nsua , byl B Agee nchmarking Survey, is a description of The data $60 ,i00 n 0 Figures 8–11 show the average account balances for participants in each plan type by four aggregated across participants’ multiple plans, as over one in three participate in more than one DC assets across all accounts, on average. This pattern is consistent with the idea that participants may 70% 7.0% calcu Fligur ation e . 2B, Assets, by Plan Type ................................ Fig................................ ure 4 ................................................................ 6 Furthermore, 83.4 percent of participan Mt es an w Acco er ue nt iBn alv an o ce lv , by ed A i gen a a nd st Ten a ut re e plan, while 3 to 7 percent plan sponsors, and many are cautious about allowing their participants early access to their retirement 401(k) 62% $4 40 0,1 00 (k 0) 31.4% 39.0% 51.6% 52.0% 44.8% 6.0% 8.6% 13.3% 16.5% 18.3% the four measures by plan type. While this method provides an incomplete picture of retirement • Th $40e ,00 0average employee contribution amoun Fig tu f reo 2 r 1t hose in their 40s was $4,125 per year, while groupings of tenure. To be consistent with the prior report, the same four groupings are used, with plan. The research also reveals that half of the participants in their 60s, the ages at which most only 70% choose to take out loans meeting a meaningful size threshold. If this size threshold does not vary 2 6.0% 9 participated in each of the remaining plan sponsor categories. The “other” category, as mentioned in 60% Percentage of Participants With Multiple Plans, by Plan Type Figure 3, Participant Ages, by Plan Type ............................................................................................................... 7 f un Thd e s. 27 Ho invwe estme ver, nt m opa tin oy n a ca lso teg r oe ricog es are ni ze as t foh lla ot w un s: (usu 1) ba alla ci ncrcums ed; (2) t ba an la ce ncs a ed ri an se d sa en ctd o so r/sp o ecfif ae ltr y;l o (3 a)n bs roa as a d in so terna urc tie on al $1804 ,00 030 (b) 81.5% 77.4% 70.3% 62.5% 47.1% 403(b) 5.9% 6.3% 8.0% 10.0% 10.1% 60% $20,000 readine tss he m at e th de ia pa n co rtin ct ip ria bn utt l io en v wa el, a ss i $t 1, do 828 es n . ot include participant use with multiple plan types, it those be $2i 0n ,00g 0 as follows: (1) less than thre Ase se y t-W eea igrs hte,d (A2) lloca be tiontsw , by e e Ten nu t rehree and seven years, ( 21% 3) greater than typically retire, had a median account balance of less than $31,055 in their current plans as of year- much across age groups, the observed pattern in Figure 18 is what would be expected, again due to $160,000 5.0% 50% F eq ig uure ity; (s 1 4) b A ro a ke nra d 1 geB w , i inn dclud ows;e (5 s v ) ca as rih o e us p quivub alel nit cs-; se (6)ct co ore r e fim xep dl o iny ce ome rs wh ; (7)o in d te o rn n ao tit o f niatl id n etv o e lto h pe e ca d ma terke gotri s e es o quitfy st ; (8 a)t e, of emergency funds. 40 50 %% 457(b) 1837 .2% .5% 29.2% 41.7% 43.7% 36.2% 457(b) 3.3% 2.4% 3.9% 5.6% 6.5% Figur $140e ,004 0 , Percentage of Participants With Multiple Plans, by Plan Type......................................................... 7 rem •a inTh s ae n e av sse eran gte ia e l co mp nlt o ri yb eu et co ion n t to ri a but dm ioin n r ist at re a ( to ers’ mp un loy de ee rst co an nt dri in bg u o tio f pub ns dilv ic id -se edct by or s DC ala pl ry) a w n use as 6. . 4 seven and less than or equal to 17 years, and (4) greater than 17 years. While each plan type has $0 36.0% $0 end40% 2022. Loan usage peaked for those in their 50s at 18.6 percent with a loan outstanding, and their the lowe 60% r average accoun 4.0% t balances among younger participants. international emerging markets equity; (9) global equity; (10) global tactical asset allocation; (11) global/international fixed $120,000 county, or city g20s overnm 30s ents. Th 40sis categ 50sory inc 60s ludes entities such as sc 20s hool di 30s stricts, 40s water 50sor powe 60s r 30% 35% 40% $100,000 32.2% percent. This rate increased with age, from 3.6 percent for those in their 20s to 7.6 percent for distF in igur ct ch e 5 a,r a M ct ea eri n st aind cs, a M cc ed umul ian A atc ec doun asse t B ts alro anc see wi , b ty h Ag age e a for ndAl te l n Plure an a Tys pe es xp C eom cted b.i Th ned e .............................. average accoun 8 t average outstanding bala 3.0% nce was $9,769. income; (12) inflation-linked bonds; (13) large-cap domestic equity; (14) mid-cap domestic equity; (15) real estate The percentage of participants who had an outstanding loan balance associated with any of their plans < 3 32% $1,828 $3,399 $3,371 $3,687 $3,459 < 3 $5,056 $8,183 $12,122 $23,424 $42,849 20% authori $8t0,000 50% ies, fire departments, and public hospitals. The second method of a Fig nua rel y 24 si s involves aggregating each participant's plaFn ig da ure 2 t5 a from various record 19% participants in their 50s, before decreasing to 8.4 percent for those in their 60s. b ina v 30e l% a s 10% n tme c $6 e0,000 n s f t to ru r s40 ts (1 RE (a IT ) pl s); (a 1n 6s ) 2.0% ri in sk cre -ba asse edd fu wi ndt sh ; a (17 g)e s e ac n td or/sp ten eure cialt be y eq fo uire ty; de (18cre ) sea csi ton r 59% g sp feo cr iap lta y rt fixe icid p ia nn co ts mi en ; t (1h 9e ) is r h60s ort- 30% 3-7 year $6,822 $10,950 25% $13,793 $14,720 $13,579 3-7 year $14,158 $17,611 $23,505 $38,328 $52,744 Figure 6, Mean Account Balance, by Age and Tenure .................................................................................... 8 is shown in Figure 16, wh Figuriech 17 r eveals a peak of 18.6 percent for the 40s anFd ig u 50s re 18 age cohort, decreasing keepers $4 As0,000 sea t-n Wd ei pl ghtea d n Al t loca yp tion es. s t Th o Mon is com ey and Sb taibl n ee Vd al v ue,i e by w Ago e f total DC asse Assett-s Wea igth t teh d e Al p loca atrt ionisci to pTa an rgt e tl -D eav tee Flu r ne dsp , by re Ase ge n antd s a Whil 0% e public-sector workers are more likely to have a defined benefit pension plan relative to their 40% term fixed income; (20) small-cap domestic equity; (21) small/mid (SMID) cap domestic equity; (22) specialty/high-yield 7-17 year 7-17 year across all t 7enure $13,4 g 64roup $2s 9,0.7 1.0% 8For i$n 45st ,594ance $4,7 a ,66m 2 ong $44 pa ,799 rticipants with thre $10e ,69 2to se $3v 4,0e 32n ye$a 43rs o ,107 f te $5n 4,0ure 03 , th $62o ,5se 81 in 25% $20,000 thereafter. Me Eq auni tyOutstanding Loan Amou Bonn dt, by Age Stable Value Mea Tanr gLoa et-Dn a teAmount as Percen Btaalagnec eof d Account Balance, O by th eA rge 20% Figure 7, Mean Account Balance, by Age and Tenure — Private 401(k) Plans ........................................... 9 significant innovation un and iPq laue n Ty pe to the PRRL. It provides a valuable opportunit Py la nt o Ty pe a ssess the retirement Loan Usage fixed income; (23) stable-value funds/fixed accounts; (24) customized target-date funds; (25) non-customized target-date private-se $0ctor peers, DB reform often involves reducing benefits to newly hired workers. As DC 17+ year $48,246 $92,812 $126,776 $107,973 17+ year $39,478 $60,916 $88,798 $105,875 0.0% 30% their 20s had an average 401(a) plan balance of $6,822. The number increased to $14,720 for those in 20s 19.0% 20s 3.3% 30s 1.8% 40s 66.5% 50s 3.1% 60s 6.2% 20% 2% 20s 30s 40s 50s 60s $12,000 30% fun10 d% s; (26) in-plan annuities; and (27) other. The “other” category refers to investment options that do not specifically fit in read Fiigur ness o e 8,f pub Mealn icA -se cc coun tor e t m Ba pla lo nc yee, es, b m y Age any o a f wh nd To enur m ae ct i — ve 4 ly 5 co 7(b n ) tP rilb aut nse ................................ to multiple plans ..................... or may stil 10 l retirement plans play an increasingly larger role for individuals entering public-sector employment, 40% 100% 2% their 50s and decreased to $13,579 for those in their 60s. 25.1% 24.9% • A35% mong participants with acc$9 e,ss t 769 o plan loans, the percentage of those who take loans from 30s 0-2 20% year 27.0% $2,131 3.5% $4,186 3.7% $5,476 49.0% $8,6344.9% $12,983 11.9% any of the other 26 categories. Meanwhile, investment options that cannot be classified are categorized as “unknown”. Mean Employee Contribution Percentage 3.6% 5.3% 6.3% 7.6% 8.4% 15% $9,438 80% have a positive balance in plans sponsored b $9,y 27 t 6 heir previous employers. These plans can differ in 30% und 0% erstanding participant behavior in public-sector DC plans is critical to ensuring retirement security Figure 9, Mean Account Balance, by Age and Tenure — 401(k) Plans ...................................................... 10 $10,000 25% 22.0% 25% their plans by age was hump-shaped, going from 3.1 percent of participants in their 20s to 18.6 60% 401(a) 401(k) 403(b) 457(b) 40s 3-5 year 37.9% $8,194 5.3% $12,145 7.1% $15,910 27.7% $21,200 10.0% $24,176 12.0% The Pu Medb ial ni c Em R ploe yet ei r Coe ntm ribut eint on P R ercee ns tae gearch La1b .5 ( %PRRL) Datab3a .2se % is an opt-in c 3.7o %llaboration am 4.3o %ng public reti 4r .7e %ment 401(a) 401(k) 403(b) 457(b) ch aracte 10% ristics (e.g., mandatory vs. voluntary contribution, available investment option19 s), .6% resulting in 10% 20% 19.6% CONTRIBUTIONS BY AGE for participants. 6.2% Figure 10, Mean Account Balance, by Age and Tenure — 40% 401(a) Plans ................................................... 10 $7,147 15% percent of participants in their 40s and 50s, and decreasing to 11 percent of participants in their $8p ,00 l0 a6- n spo 10 yearnsors. Plan sponsors receive complimentary b 20% enchmarking as a participation benefit. For more 50s 40.8% $13,446 7.0% $22,522 12.6% $32,440 20.2% $46,0069.7% $58,408 9.6% 10% varying usage patterns. Therefore, this aggregated approach offers a more comprehensive 20% 5% 0% 5% Figure 11, Mean Account Balance, by Age and Tenure — 403(b) Plans ................................................... 10 Figure infos 12 60s. Th rm isa a ti a o nn n o ad ly 13 s n h is uo sh sw eso t u w t op p da h are tti e do c d ip d a ll a te atr a , p a , l im n ec a o rse e un a c s to is c nnt g o a th c nt NA e tri to btut G alDCA e p d a by rti c E e ix pe m a cn u p ttl ic o vo y eu e Di n ets t r e frc o o tm t orh M 2e .4 ia r m tt p P illla io e n n te s by tro se o n a v a e gr t e 3 . A mg illa ioin n., Contribution amounts and rates detailed in Figures 14 and 15 include any employer and employee 11-20 year Equity Bond $41,721 Stable Value $63,105 Target-Date $79,474Balanced $84,319 Other Th e a60s ge distrib 34ut .4%ion of public-7.8% sector employe 24 e.2% s described in17 F.4% igure 3 illumin9.7% ates the underly 6.6% ing 0% 0% understanding of retirement readiness than analyzing each plan type individually. $6,000 15% 0% 20s 30s 40s 50s 60s 20s 30s 40s 50s 60s mpetersen@nagdca.org. these • da Pa trt a ia ci re p a an g tg s i re ng ta hte eid r 5 to 0 sh s ho aw t d th oe ta h l ie gm he p st lo a yv ee er con aget ri ob ut us ttio an ns a dincr g o lo ss a an l b l DC alan pl cea of ns, $ pe 9,769 r pa,rt but icip ta h n ety . contributio $3 n,96 s.8 Distinct to the public sector, the DC plans may have mandatory contributions, voluntary Figur 0- 21- 5 ye 30 ea r1 ye2 ar, Mea24 n .6% and Median E 5.6% mployee Cont 4.4% ribution $104 s,, 86 b6y Age 56.5% ................................ $149,895 2.6% ................................ $1536.3% ,934 .. 11 d emographic characteristics of each plan type. The age distribution of 401(a) plans, which are 401(a) 401(k) 403(b) 457(b) 401(a) 401(a) 0.4% 4.1% 8.7% 10.1% 15.9% 78.1% 55.8% 30.9% 27.3% 25.4% $4,000 10% One important caveat to this edition of the State of Public-Sector DC Plans is that, although the As expa elct so e h d,a co d t nh te ri b se ut con iond s i ln ocre wea ss t e lo da a ns a es m ap pe loy rce een s ta ap gp ero ofa t ch he ed to rte atli re acc mo eun nt a t b ga el.a Th nce e da of t1 a9. in 6 F p ig eure rcen 13 t. contributions, or both. In hybrid pension structures, a mandatory contribution from the employers and 6-10 year iF n ig cre ure asi 31+ 19 ng yea l ay rl use so re dv 33 a e.s pri a 9% ls am llo ac ry a pl tioa nn s i 5.8% s,n wa lins e w sliig th h tb ly e 5.5% ske havw iors d ed te om wa on rd y 38st .2% ra ot un ed g by e$1 r 47 pri p,a 29rt 3 v3.7% ia ci te p- ase nts ct , o wi r p t$1 h la n 59n 12 ,58 e .9% a 0 rly 40 Figure 13, Mean and Median Employee Contributions as a Percentage of Salary, by Age ................. 11 401(k) 0.5% 1.6% 4.2% 7.4% 13.8% 401(k) 61.6% 47.6% 24.2% 15.9% 15.3% com repre pse osi nttio s n a o si fg g n o if vie ca rn nm tly e sm nt ta ylp le er s r ne umbe porte r d o ifn p F airt gure icip 1 an A ts du is sie m tio la tr hte o ltih m eit pri edo ar m re op un ortt ,o tfh sa e n la u ry m da ber tao f the employees is common, typically going into a 401(a) plan. Since employers often have mandatory p pa erce rtic11 n ip t -20 a o n yfet as sh trhe pa own rti i cin p F an ig ture s be 20. ing Eq in t ui hte yi a r 20s sseta s i nn dcre 30s ase . C d o un nve tirse l thle y ,5 p 0s a lan t gy ep co es m horo t.r Th e he ist use oric o afl t ly a us rge etd - as $2,000 33.3% 8.0% 7.6% 5% 21.1% 5.4% 24.6% Looking at the combined account balances across all plan types and record keepers in the database, as Figure 14, Mean and Median Total Contributions, by Age ............................................................................ 12 Asset Allocation 403(b) 5.5% 7.3% 10.7% 16.6% 35.4% 403(b) 1.9% 2.0% 0.9% 0.5% 0.5% sh pla an re s a d be nd ttw he e spe en gci ov fie c p rna m rt ein citp s a ann t po d th pe ul ir aDC tion pl in aclud n record ke ed in the ep P eR rs. R L D Wita h to aut ba se the h sa avle a ry ch ia nn fo grm ed.a Di tiofn fe , rences contributions for a DB plan, matching employer contributions is far less common than in the private d U sup a lttie m p lf20 a e un t m + ed yl e ey as n r, t t wa a hle pl s a con a bn 42 ils i .2% ce ty in n t t o th ra a et g pub e g d re in g li y c se a6.4% to eun pub ctg oe r l r ( ic e coh - .g se .,o ct 457( rto s, 18 r . n 4% DC b o)t, da 403( bet ca a e b us ) n ,e 401( a t b 13 h l.e 3% es t pro k)h ) e we d cl uc re otse s a sl st irg e 8.4% co h n tl o m yt p us sk ar e e iw so d by e nd wi to 11 ol t t .d h 4% h e te r h e ri ght, would be expected, the average and median account balances increased with age (Figure 5). The $0 0% Figure 4571 (b5 ) , M 3ea .8% n and 4.4 %Media 7.3n % Tota1l 5C .2%ontrib 29ut .0%ion Rate, by 4Ag 57(b)e................................ 65.6% 48.3% 2................................ 8.9% 19.6% 16.3%.... 12 5 b con etwe trib eut n ia ov ne rra atg ee s b ca al n a n n o ce t b s,e co ca n lt cu rib la utte io dn . s, and other metrics from this report and those previously sector. When matching contributions are offered, they are typically for either 401(k) or 457(b) plans. p sh em rio v p wi alt oe n y- g e se a es c h ,t o b ig r ut h d e be a r tcon a c a ause v ce ain l y a tb ra olun e ti o tg o ne d o r a fcoh o tel ( d o F e rt ir g s h p ure aa rt v 7) ici e a .p Th a h nie tg s. a h e cc r umul conce an te td ra DC tion s o afv n in e g w s f eo m r p plub oyle ic e es,m ap nld o y ta erg es i etn - • Participants in their 20s had the largest allocations to target-date funds (66.5 percent). average account balance for individuals in their 20s was $4,800 and increased to $73,013 and 20s 30s 40s 50s 60s 20s 30s 40s 50s 60s Figure 16, Percentage of Participants With a Loan Outstanding, by Age ................................................. 13 reported are driven by changes in market conditions as well as changes in the composition of d Fia gture e fun 6 d cle s a are rly t h la eg de be fa hul int d i n th ve e co stm m ep na t f ra ob r m le d an at ya pl (fa ro nm s. 202 2) for private employees in Figure 7 in nearly $92,018 for individuals in their 50s and 60s, respectively. However, these averages are heavily Employee contributions generally increased with age, both in dollar amount and as a percentage of Similar to employee contributions, the total contributions increased with age, both in dollar amount participants in the database. Figure 17, Mean Outstanding Loan Amount, by Age ..................................................................................... 13 every category of age and tenure. These results are expected for two distinct but related reasons: DB influenced by large account balances. The median account balances of PRRL participants in their 50s sa lary. However, the median dollar amount for participants in their 60s showed a slight decline. For and as a percentage of salary, but the median dollar amount for participants in their 60s showed a © © © © © © © © © © © © © © © © © © 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 02 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 24 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 P P P P P P P P P P P P P P P P P PR R R R R R R R R R R R R R R R R RR R R R R R R R R R R R R R R R R RL L L L L L L L L L L L L L L L L L 10 16 17 15 11 12 13 18 14 19 6 9 8 7 4 5 3 2