Importance of Public Sector Defined Benefit Plans

In October, the Center for Retirement Research published “Do Public Pensions Help Recruit and Retain High Quality Workers?” One of the major findings was “Research shows that pensions help recruit and retain high-quality workers; thus, cutbacks in public pensions could hurt worker quality.”

The Callan report addresses debate and criticism of defined benefit (DB) retirement plans by demonstrating their importance as a critical retirement tool for public employees. As one section notes, DB plans are both cost effective and reliable for providing retirement security so long as basic rules are followed, such as employers making their full annual required contributions and employees paying their share of contributions.

From the report: “The funded status of public employee defined benefit (DB) retirement plans continues to garner great debate in the industry and press. DB plans are the primary vehicle for ensuring retirement income security for public workers, and Callan believes these plans are viable and necessary in this sector.”

Read the Callan report “Saving Public defined benefit Plans.”