NRTA: Report from the Director
Report from NRTA December 18, 2008
A new report separates myth from fact on costs of defined benefit plans.
By: Megan Hookey | Source: NRTA Live & Learn
Megan Stevens Hookey, Interim Vice President, NRTA
Prior NRTA Director Letters
Welcome to Live & Learn online!
ONE ASPECT OF THE WORK OF NRTA: AARP's Educator Community is to monitor trends in public employee retirement issues including pensions and other benefits. As some state governments consider changing their defined benefit (DB) plan to a defined contribution plan, it is important that legislators rely on facts rather than the myths often associated with the cost of DB plans.
The National Institute on Retirement Security (NIRS) released a report in August 2008 called A Better Bang for the Buck: The Economic Efficiencies of DB plans. The report tested and validated that DB plans are a better value for a state at almost half the cost of a defined contribution plan—a 46% cost savings. The NIRS study concludes: “The very features that make defined benefit plans attractive to employees drive cost savings for employers and taxpayers. In this way, DB plans represent a rare ‘win-win’ approach to achieving economic security in retirement that should be recognized and replicated.”
NRTA is delighted to have this kind of definitive research available to help educators past and present protect their pension plans in ways that are also beneficial to state governments. We hope policymakers consider proposals that can strengthen existing DB plans to bring well-deserved peace of mind and cost savings to retirees and taxpayers alike. For more information about this report, go to www.nirsonline.org and click on the Research tab.
With best regards,
Megan
Megan Stevens Hookey
Interim Vice President
NRTA: AARP's Educator Community
Interim Vice President
NRTA: AARP's Educator Community
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