Washington – The MissionSquare Research Institute (the Institute) released new research today examining key differences in financial decision-making between public- and private-sector employees, including how they seek financial advice, invest, adopt technology and plan for retirement income. The findings are further detailed in a new research report titled "How to Help Retirement Plan Participants Make Optimal Financial Decisions: Evidence From Public and Private Sector Employee Behaviors," co-authored by Zhikun Liu, Ph.D., CFP®, vice president of MissionSquare and head of the Institute; David Blanchett, Ph.D., CFA, CFP®, head of retirement research at Prudential Financial; and Gerald Young, senior researcher at the Institute.

While the research identifies many differences in the ability to plan and save for retirement, the most significant gap appears in seeking financial advice. Public sector employees are significantly less likely than their private sector peers to work with financial advisors and significantly less interested in working with digital or artificial intelligence solutions. Survey participants were segmented into one of six categories based on whether they are public or private sector employees and the type of retirement plan they participate in — defined-benefit (DB) only, defined-contribution (DC) only, or both DB and DC. Among DB-only plan participants, just 46% of public sector employees report working with a financial professional, compared with 70% in the private sector.

“Public sector employees are often navigating complex financial decisions with limited guidance or turning to friends and family instead of professional resources for support," said Dr. Liu. "Over time, these decisions can lead to uncertainty around investment decisions, lower financial confidence, and unclear retirement income strategies, indicating a clear need for employers to intervene and offer their support.”

The findings point to several actionable opportunities for employers and plan providers to expand access to guidance and better support workers' long-term financial outcomes. Key takeaways include:

• Expand access to human financial advice. Public sector workers are significantly less likely to work with a financial advisor and show lower interest in fully digital solutions, highlighting an opportunity to increase access to human guidance and offer a more hybrid support approach.
• Optimize plan design to encourage higher savings. Lower savings rates among public sector workers are closely tied to fewer employer contributions, reinforcing the value of matching contributions and other incentives designed to promote higher deferral rates.
• Reduce complexity in investment menus. Many public sector workers lack confidence in building financial portfolios. Because overly complex investment menus are linked to lower savings rates, employers can streamline fund lineups to ease decision-making.
• Provide goal-based, income-focused retirement guidance. Many public sector workers remain uncertain about how they will draw down their savings in retirement, creating demand for integrated retirement-income tools that connect all sources of income, not just retirement account balances.

“Employees do not make a single decision when it comes to planning for their retirement," said Dr. Liu. “They make a sequence of interconnected decisions over decades. Our research shows that thoughtful plan design, combined with access to professional guidance, can help significantly improve long-term financial outcomes for workers across both the public and private sectors.”

The research is based on a nationally representative retirement and financial wellness survey conducted by the MissionSquare Research Institute and Greenwald Research in December 2025, including more than 2,000 full-time public and private sector employees nationwide. Additional details, along with the full research paper, are available on the Institute's website.

About MissionSquare Research Institute

MissionSquare Research Institute identifies and advances best practices in retirement planning, financial wellness, and workforce development strategies to help meet the evolving needs of the public and private sector workforce. Through rigorous, data-driven research, in collaboration with industry-leading thought leaders and academics, the Institute delivers actionable insights and innovative strategies that support MissionSquare’s broader mission to help all individuals and their families build financial security.

About MissionSquare

Since its founding in 1972, MissionSquare has remained committed to delivering on its mission to help all individuals and their families build financial security. As a mission-based financial services company, we manage and administer over $73.6 billion in assets.* Our commitment to delivering outstanding service, effortless technology, and quality investments sets us apart. For more information, visit www.missionsquare.com.

*As of June 30, 2026. Includes 457(b) plans, 401(a) plans, 403(b) plans, Retirement Health Savings plans, Employer Investment Program plans, affiliated IRAs, and investment-only assets.