How to 'DB-ize' your supplemental DC retirement plan

Reduced revenues and growing demands for services have led governments to examine the financial sustainability of their retirement plans, resulting in widespread pension reforms. According to the National Conference of State Legislatures, 43 states have implemented substantial changes to their pensi...

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Bibliographic Details
Published in:Government Finance Review 2013-04, Vol.29 (2), p.14
Main Authors: Sanford, Paula, Franzel, Joshua
Format: Magazinearticle
Language:English
Subjects:
Changes
Cost control
Cost of living adjustments
Defined benefit plans
Defined contribution plans
Economic reform
Employment contracts
Enrollments
Evaluation
Forecasts and trends
Investment policy
Laws, regulations and rules
Local government
Methods
New employees
Participation
Pension plans
Political aspects
Retirement benefits
Retirement income
Retirement plans
States
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Summary:Reduced revenues and growing demands for services have led governments to examine the financial sustainability of their retirement plans, resulting in widespread pension reforms. According to the National Conference of State Legislatures, 43 states have implemented substantial changes to their pension plans in 2009-2011, as have numerous local governments. Many of these changes will reduce employees' pension income in retirement, and some employees with shorter tenures will no longer have access to the benefit. To offset these and other related impacts, many public employees will need to supplement their savings. The primary goals of recent pension reform legislation have typically been to reduce costs and employer risk, adjust to the needs of a more mobile workforce, and equalize benefits between the public and private sectors. DB-ization is an outcomes-based approach to defined contribution plan design that attempts to achieve an adequate retirement income for workers through adoption of specific plan components, strong employee communication, and acceptance of participant behavior.
ISSN:0883-7856