Why Not A Defined Contribution Retirement Plan for Public Employees?
• Only by moving to a defined-contribution retirement plan, like a 401(k), can we remove the politics from public pensions and give taxpayers more affordable and predictable costs. • SB 566 would create a defined contribution plan for new employees in which the employer (the state, school districts, and local governments) would contribute 6% of salary into a retirement fund owned by employees. Employees would also contribute 6% of their salaries. • The Senate legislation has 18 cosponsors and Republican gubernatorial nominee Tom Corbett has campaigned on adopting a defined contribution plan. • Pennsylvania voters support moving to a defined contribution plan, as most of the private sector already has, according to a poll from April 2010 (see table below). Q: Most government employees – including teachers, state workers, judges, and legislators – receive a pension plan which provides a guaranteed annual payment upon retirement. There is legislation to move all new government employees t
Related Questions
- Wouldn’t it be cheaper for the employers if new public employees were required to enroll in a defined contribution plan?
- Who would have the power to switch Illinois public employees from a defined benefit to defined contribution system?
- What exactly is the role of a taxpayer in funding a defined benefit plan for public employees?
