Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
[STK]
[IN] FIN WRK
[SU] ECO SVY STP
TO BUSINESS, AND NATIONAL EDITORS:
Defined Contribution Plans In The Public Sector: An Update
WASHINGTON, April 24, 2014 /PRNewswire-USNewswire/ -- The 2008
financial crisis prompted many state and local governments to make
changes to their defined benefit pensions, most often raising employee
and employer contributions and reducing benefits for new employees.
A new issue brief from the Center for State and Local Government
Excellence, Defined Contribution Plans in the Public Sector: An
Update, finds that while there has been much discussion of shifting
from defined benefit to defined contribution plans, relatively few
governments have actually done so.
Written by Alicia H. Munnell, Jean-Pierre Aubry, and Mark Carafelli of
the Center for Retirement Research at Boston College, the brief finds
that defined benefit plans still dominate and only about 11 percent of
public sector workers have a primary defined contribution plan.
Other key findings include:
-- Post-2008 changes have been to establish either hybrid plans or
cash balance plans, rather than stand-alone defined contribution
plans.
-- The changes appear driven by a desire to avoid future unfunded
liabilities, to reduce investment and mortality risk, and to help
short-tenure workers.
-- Such changes transfer risk to participants, but if the new plans
enhance the likelihood of responsible funding, they could also offer
some increased security.
In particular, the brief looks at hybrid plans established by Georgia,
Michigan, Rhode Island, Utah, Tennessee, and Virginia, and cash
balance plans in Kansas and Kentucky.
This brief updates 2011 Center research on defined contribution plans
in the public sector
(http://slge.org/publications/a-role-for-defined-contribution-plans-in-the-public-sector).
Read the full brief at
http://slge.org/publications/defined-contribution-plans-in-the-public-sector-an-update.
Access all Center retirement research at
http://slge.org/research/retirement
About the Center for State and Local Government Excellence The Center
for State and Local Government Excellence helps state and local
governments become knowledgeable and competitive employers so they can
attract and retain a talented and committed workforce. The Center
identifies best practices and conducts research on competitive
employment practices, workforce development, pensions, retiree health
security, and financial planning. The Center also brings state and
local leaders together with respected researchers and features the
latest demographic data on the aging workforce, research studies, and
news on health care, recruitment, and succession planning on its
website, www.slge.org.
SOURCE Center for State and Local Government Excellence
-0- 04/24/2014
/CONTACT: Amy Mayers, 202-682-6102, amayers@slge.org
/Web Site: http://www.slge.org
CO: Center for State and Local Government Excellence
ST: District of Columbia
IN: FIN WRK
SU: ECO SVY STP
PRN
-- DC11822 --
0000 04/24/2014 12:00:00 EDT http://www.prnewswire.com
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
