Date of this Version
Defined benefit plans remain the predominant form of retirement benefit for employees of state and local governments in the United States, which employ more than 10 percent of the nation’s workforce. This chapter describes the divergence between pensions in private industry, where the focus has shifted sharply toward defined contribution plans, and in the public sector, where defined benefit plans continue to dominate. One reason is that public employers have the ongoing responsibility of attracting and retaining a large workforce whose diversity is unmatched in private industry. We also offer an economic analysis of public plans, focusing on the value-added to state economies from investment returns which are often superior to those generated by defined contribution plans.
Working Paper Number
©2004 Pension Research Council of the Wharton School of the University of Pennsylvania. All Rights Reserved.
The authors wish to acknowledge the significant contributions made to this paper by Cathie Eitelberg, Gary Johnson, Jeannine Markoe Raymond, Bill Wallace, and Paul Zorn.
Date Posted: 30 August 2019