hen it comes to financial literacy, there is no need to read between the lines — too many Americans do not understand basic financial concepts and how to use them to build long-term financial security.
State and local government workers face increasingly complex challenges in financial decision making. Since the range of reforms that followed the Great Recession, many public employees must navigate different options and structures for retirement and other benefits, many of which are less paternalistic than those previously in place. At the same time, these options require more decision-making responsibility by the individual — and often pose a greater level of risk. Public sector workers are not confident that they will be able to retire when they want, that they are saving enough money for retirement, or that they will receive all the benefits they are entitled to once they do retire.
Local government employers have good reason to care about the financial health of their workforce. Non-wage benefit compensation plays an important role in helping local governments compete in the labor market and attract and retain the workforce that they want. When people are more in control of their finances, they are less distracted at work and can focus on doing their jobs more effectively.
- Background on the local government workforce
- A review of the literature on what is known about financial literacy
- Data from a survey of elected officials and human resources (HR) directors from local governments across the United States
- Insights gained from discussions with city managers and budget officers
- Recommendations for practitioners, focusing on program topic and mode, tailoring programs to diverse groups (e.g., local workers for whom English is a second language, those with lower levels of income or education), and assessing results.