Part-time careers exact outsized cuts in public plans
Pew modeling finds part-time careers and caregiving breaks cut retirement benefits more than hours lost across DB, DC and hybrid designs — a caution for sponsors who test adequacy against the full-time norm.
A defined benefit pension is the retirement structure with the strongest security promise, but new modeling from Pew Charitable Trusts finds its formula the least forgiving of a part-time career. A public-sector employee who spends a full 35 years at 20 hours a week would collect 75% less in annual benefits than a full-time colleague. The comparable losses are 67% in a hybrid plan and 50% in a defined contribution plan.
The analysis, from Pew's State Fiscal Policy project, tests hypothetical workers across the three designs at a moment when part-time work is common. Bureau of Labor Statistics data show 11% of employed Americans ages 25 to 54 worked part time in 2025, many of them out of the workforce for caregiving and family obligations.
In the DC plan the arithmetic is honest: half the hours produce roughly half the benefit, nearly $18,000 a year versus nearly $36,000. The hybrid and DB designs fall well short because the DB formula multiplies final average salary by years of service, leaving the part-time worker disadvantaged on both factors.
The DC plan's proportionality also disappears when reduced hours arrive mid-career, after years of full-time contributions. Five years at part-time hours — the equivalent of 7% of a 35-year career — trims estimated benefits by 9% in the DC plan and 8% in the hybrid. Ten part-time years, 14% of career time, cost 17% in the DC plan and 15% in the hybrid as missed contributions and lost investment growth compound the damage.
Exits from the workforce are costlier still. Five years away, 14% of a working life, cuts benefits by 18% in the DB plan, 19% in the hybrid and 21% in the DC plan. Ten years away, 29% of a career, produces losses ranging from 34% in the DB plan to 38% in the DC plan, with the hybrid at 36%.
Pew's researchers also examined a set of actual public-sector retirement plans and found they did not clearly explain how switching to part-time hours or temporarily leaving the workforce would change benefits. That gap suggests participants are making those decisions without a clear view of what they will cost.
The DB structure that reads as the safest promise on a benefit statement takes 75% of the benefit from a half-time career, and Pew found the plans themselves do not surface that arithmetic in their communications. Any adequacy model built on one unbroken, full-time 35-year career is priced for a schedule that plainly does not describe the workforce Pew just quantified. Sponsors now have the data to price the alternative.
The Wrap