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NIRS Releases Case Studies Report on States that Switched from DB Plans to DC Plans
August 7, 2019, the National Institute on Retirement Security (NIRS) released its report, Enduring Challenges: Examining the Experiences of States that Closed Pension Plans. The report provides case studies in four states that closed their defined benefit (DB) plans and switched to defined contribution (DC) or cash balance plans for new employees, including: Alaska, Kentucky, Michigan and West Virginia.
Key findings include:
- In the four case studies, the states that switched from a DB plan to a DC or cash balance plan experienced increased costs for taxpayers without significant improvements in funding;
- Plan design changes have contributed to greater retirement insecurity for employees; and
- Due to retirement benefit changes, various workforce challenges have developed, such as recruiting and retaining public employees since the pension plans were closed to new hires.
The report is available here.