In states that have switched their employee retirement plans from the defined benefit approach to a defined contribution option, costs and levels of retirement insecurity have both increased, rather than fallen.
That is the conclusion of the National Institute on Retirement Security, based on its examination of the performance of three states that shifted away from traditional pension plans: Alaska, Michigan and West Virginia.
The Washington, D.C.-based institute said it undertook to the study to address a "misperception (that) persists among some that defined contribution plans save money when compared with traditional pensions."
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