Problems with state-local final pay plans and options for reform

Diamond, Peter A., Alicia Haydock Munnell, Gregory Leiserson, and Jean-Pierre Aubry. “Problems with state-local final pay plans and options for reform”. State and Local Pension Plans 12, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, August 2010. http://hdl.handle.net/2345/bc-ir:104252.
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Abstract

The brief's key findings are: (1) Defined benefit plans based on final pay: "backload" benefits, so younger shorter-service employees get virtually nothing; (1b) favor those with high earnings growth, who tend to be higher paid; and (1c) invite sudden late-career "spikes" in earnings. (2) Moving to career-average earnings would: (2a) provide reasonable benefits for younger shorter-service employees; (2b) treat high- and low-paid employees more equitably; and (2c) late-career spikes in earnings.

Title
Problems with state-local final pay plans and options for reform
Author
Diamond, Peter A.
Munnell, Alicia Haydock
Leiserson, Gregory
Aubry, Jean-Pierre
School
Carroll School of Management
Discipline
Finance
Center
Center for Retirement Research
Genre
report
Date Issued
August 2010
Publisher
Center for Retirement Research at Boston College
Series Title
State and Local Pension Plans
Series Number
12
Version Identification
Version of record.
Persistent Link
http://hdl.handle.net/2345/bc-ir:104252
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
State and local pensions

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