Employers and business owners engaged in for-profit enterprises are afforded greater latitude in selecting and implementing retirement planning solutions than those in the governmental and not-for-profit sectors; the latter sectors are frequently more encumbered by governmental regulations which may limit available options. Furthermore, for-profit enterprises include many small businesses, including businesses comprised of single individuals. Greater flexibility and greater breadth of scale in for-profit enterprises allow for and necessitate greater customizability in retirement planning solutions to better address the needs of individual employers and employees. In comparison, the larger scale of many governments (especially the vast scale of the United States Federal government) may afford greater cost efficiencies in implementing retirement planning solutions.
Additionally, employees may perceive some tradeoff between wages and benefits when comparing for-profit employers to governmental and not-for-profit employers. A Congressional Budget Office Report published in April 2017 titled “Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015” noted differences in compensation related to education level. Differences were noted in wages related to education level: higher wage compensation for private sector workers at the professional or doctorate degree level (24% higher), similar wage compensation at the masters and bachelors degree levels, and higher wage compensation for federal workers below the bachelors degree level (e.g., 34% higher at the high school or less education level). Similarly, differences were noted in benefits related to education level: similar benefits at the professional or doctorate degree level and higher benefits for federal workers below this level (e.g., 93% higher at the high school or less education level). Similarly, differences were noted in total compensation (including wages and benefits) related to education level: higher total compensation for private sector workers with professional or doctorate degrees (18% higher), similar total compensation at the masters degree level, and higher total compensation for federal workers below the masters degree level (e.g., 53% higher at the high school or less education level). While the highest educated workers appeared to benefit in the private sector and less educated workers appeared to benefit as federal workers, the report concludes: “Overall, the federal government paid 17 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.”