Although the introduction of defined contribution retirement plans by some states has received much attention, actual activity thus far has been modest, according to a brief by the Center for Retirement Research at Boston College.
In the wake of the financial crisis, sponsors of state and local government pensions cut back on existing defined benefit plans by raising employee contributions and initiated proposals to shift some or all of the pensions system to a DC plan.
But the CRR said its analysis of the data post-crisis found that most of the recent efforts have been a move to either hybrid plans, with a mandatory defined contribution and defined benefit component, or to cash balance plans, where participants are guaranteed a return of 4 or 5 percent.
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