The attacks on public pension plans are constantly changing. Pension critics claim public employees need to be given a choice between defined benefit pension plans and 401(k)-style defined contribution plans. This is an unnecessary and risky choice.

Public employees, like all Americans, want a secure and reliable way to save for retirement. Pensions provide that security. Pensions also provide a regular, monthly benefit in retirement for life. Defined contribution plans, like 401(k)s, do not provide either security or reliability. Defined contribution plans are subject to whims of the financial markets. If the markets take a downturn just before a planned retirement, working people could lose the majority of their savings overnight.

According to recent polling, 85 percent of Americans say that all workers should have access to a pension plan so they can be independent and self-reliant in retirement.

In several states, public employees already have a choice among different types of retirement plans. Public employees in these states overwhelmingly choose pensions when given the choice.

  • Colorado: 88% chose the DB pension vs. 12% chose the DC plan
  • Florida: 76% chose the DB pension vs. 24% chose the DC plan
  • North Dakota: 98% chose the DB pension vs. 2% chose the DC plan
  • South Carolina: 82% chose the DB pension vs. 18% chose the DC plan

In 1991, the West Virginia legislature closed its defined benefit pension plan for teachers in favor of a 401(k)-style defined contribution plan. For the next 17 years, West Virginia teachers were enrolled in that defined contribution plan. Eventually, the West Virginia legislature voted to reopen the closed pension plan after a study showed that the pension plan offered equivalent benefits at half the cost of the defined contribution plan. When teachers in the defined contribution plan were given the choice to switch to the reopened pension plan, more than 78 percent made the switch.

Public employees know defined benefit pensions are the best path to a secure retirement. Rather than offering an unnecessary and risky choice among different retirement plans, state legislatures and governors should focus on strengthening and expanding defined benefit public pension plans.

To fight back against the false information about plan choice, we’ve created this one-pager. Many other reports and one-pagers are available on the Resources page of our website.