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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.
Key findings include:
- Early-career balances remain very low
- Early career savers may be under-invested long before they approach retirement - focused outreach and default design are critical.
- Contribution rates increase with age, but many persist at modest levels
- Administrators should emphasize contribution rate strategies (e.g., auto-escalation, default deferral nudges) and mid-career messaging to bolster savings.
- Loan usage peaks in mid-career and can erode long-term outcomes
- Plan administrators should monitor and communicate the long-term cost of loans, and explore policy levers and education to reduce detrimental borrowing.
- Asset allocation shifts with age: heavy target-date use early, more stable value later
- Ensure the investment lineup (glide-path, default options, stable value/stable income options) aligns with participant behavior and lifecycle needs; clear communication around risk and time horizon is vital.
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- November 20, 2025 Create Date
- December 4, 2025 Last Updated
