Decisions, Decisions: Retirement plan choices for public employees and employers

In recent years, a handful of states have begun to offer public employees a choice between a traditional defined benefit (DB) pension and a defined contribution (DC) account as their primary retirement plan. This paper finds that public employees overwhelmingly choose the DB pension plan.

This preference, coupled with the fact that DB pensions remain the most cost-effective way to fund a retirement benefit, suggests that the public sector is unlikely to mimic the trend away from DB pensions in the private sector.