State pension reforms to result in more hybrid pension plans — report
Published: June 13, 2013 - Pensions & Investments
More states will create hybrid plans in the future because of the
less-volatile contribution levels and the fact that the defined contribution
components are portable for a workforce that is now increasingly more mobile,
according to a new report from the TIAA-CREF Institute and the Rockefeller
Institute of Government.
“There are pluses and minuses to the two fundamental (defined benefit and DC)
structures,” Paul Yakoboski, senior economist for the TIAA-CREF Institute, said
in a telephone interview. “We have to figure out a way to move away from the DB
vs. DC debate, (in terms of choosing) one or the other. … There's a lot of
flexibility in how a DC plan can be arranged.”
Mr. Yakoboski co-authored the new report, which suggests state officials
planning pension reforms should consider key issues such as retirement income,
changing workforce patterns and long-term effectiveness.
The report stems from a forum held in December with state and local
officials, union leaders and researchers across the country.
“There was basically a message that, even if finances have driven
(governments) to considering reform … let's get it right in context of being
fiscally prudent, but in the process of changing (plans), let's have something
that works for employers and the workforce,” Mr. Yakoboski said.
Much of the forum was spent discussing different reforms states have enacted
and looking at the key areas states and local governments should consider. All
the speakers and attendees' comments at the forum were driven by finding ways of
replacing retirement income, Mr. Yakoboski said.
Original Story Link: http://www.pionline.com/article/20130613/dailyreg/130619926