2/17/2005
19
If it Ain’t Broke…
Q: Is defined contribution really preferred by the private sector and other states?
A: NO. Most large private sector companies have a defined benefit plan like ours
Among employers with 10,000+ employees use of DB is increasing
SBC recently reinstituted its DB plan. Others are: Chevron, Unocal. Lockheed Martin, Boeing, Albertson’s, etc.
Nebraska recently converted back to DB. DC returns were 6-7%; DB plan returned 11%.
Kansas rejected DC saying, “conversion from the current defined benefit plans…would not result in lower employer contributions….”