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Inspiration from inflation

Dec 9, 2022
Empower Institute

How government workers are staying financially healthy

Rising costs across the country, from gas prices to mortgage interest rates to grocery store bills, are causing stress and angst. More than 70% of government employees don’t believe their income is keeping pace with inflation.1

With Americans continuing to face unprecedented challenges with their money, Empower recently talked to several of its government partners to understand how they’re navigating today’s ever-changing landscape.

Through our exclusive interviews, we learned that many agencies in the government space are going above and beyond by:

  1. Showing their support: Government agencies empathize with the many financial challenges their employees are facing, but at the same time they also tout the resilience of their employees. Empower insight reveals that nearly half of workers in the public sector feel very healthy about their financial situations right now. And despite a record inflationary period, average defined contribution savings rates for public sector workers have increased from 6.3% to 6.6% over the past 12 months.2
  2. Putting their workers first: With inflation rising across the country, government employers are doing their best to rise to the occasion. They are tackling key issues head on and coming up with solutions to lift their employees’ productivity — and spirits. They are also taking action when it comes to cost-of-living adjustments and boosting the appeal of their retirement plan offerings.
  3. Building a strong and stable team: Government employers are focused on increasing the competitiveness and appeal of working in the public sector. They are zeroing in on meeting the needs of a diverse group of employees from different generations who are serving in a wide range of roles. Efforts range from enhancing retiree health programs to offering generous signing bonuses to attract police officer recruits.
  4. Embracing education: Employees are worried about the erosion of their buying power and market declines, and they are seeking help and guidance. In fact, Empower research finds that financial advice is more in demand now than ever as 59% of government workers wish they had sought guidance earlier.In response, government employers are doing all they can to help their employees by offering retirement readiness campaigns, webinars, tailored communications and advisory resources.
  5. Inspiring financial wellness: Government agencies are also stepping up to meet employee broader financial well-being needs. Public sector employees are worried about their overall well-being because of the economy, and more than half are having trouble concentrating on their daily responsibilities.4 Employers understand that financial, mental and physical wellness all go together.

The road ahead

Here are a few ways to help public sector employees improve their overall mental, physical and financial well-being so they can stay on track to reach their goals.

Listen: What key concerns do your employees have? How are they adjusting to today’s inflationary environment? Do they need a mental break? Be open to making changes that can better the overall well-being of your employees.

Learn: Financial wellness and total compensation are more important than ever. When it comes to hiring new talent, find out what products, features and benefits may be popular among today’s workers.

Lean: Lean on your benefits providers like Empower to help with financial wellness communications and campaigns. As partners, Empower and other organizations can come together to assist members will all their financial needs.

To learn more about how government employees are faring during this inflationary period and how government employers are stepping up, download the white paper.

 

 

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1 Empower, Wealth and Wellness Mid-Year Survey, April 2022.

2 Analysis of 1.8 million active government defined contribution plan participants with a balance >$0 and Empower as the recordkeeper. Savings rate is the portion of compensation a participant has chosen to contribute to the retirement account expressed as a percentage of compensation. It is calculated for eligible participants who are saving and have a balance >$0. It does not include employer match. For some plans in which the employer does not provide compensation information, saving rates are estimated using reasonable assumptions.

3 Empower, Wealth and Wellness Mid-Year Survey, April 2022.

4 Ibid.

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