A Role for Defined Contribution Plans in the Public Sector

New Center for Excellence Issue Brief

WASHINGTON, April 21, 2011 /PRNewswire-USNewswire/ -- The Center for State and Local Government Excellence has issued a new issue brief, A Role for Defined Contribution Plans in the Public Sector.  Written by Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, and Laura Quinby of the Center for Retirement Research at Boston College, the brief's key findings are:

• In recent years, a few states have shifted from defined benefit (DB) to defined contribution (DC) pension plans.
• Many of the new plans are "hybrids" with a slimmed down DB plan and a minimal DC plan, which shifts substantial risk to employees.
• An alternative hybrid design could offer a full DB plan up to an income cap and "stack" a DC plan on top for those with higher incomes.
• The "stacked" approach would give those with modest incomes the full protection of a DB plan while limiting taxpayers' commitment to those with higher incomes.

Read the full brief at http://tinyurl.com/arolefordcplans.

Find all the Center's publications on public sector pensions and retiree health care at www.slge.org.

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