Public Employee Pensions – Making the Right Choice
Files
Date
2018
Authors
Coward, Jonathan
Journal Title
Journal ISSN
Volume Title
Publisher
Law Enforcement Management Institute of Texas (LEMIT)
Abstract
Description
When it comes to public sector careers, one of the primary benefits of choosing a career of service is the opportunity to participate in a defined benefit pension plan. When properly funded and supported by local administrators, a defined benefit plan is the most beneficial option for all stakeholders involved. These stakeholders are the employees receiving the benefits, the administrators managing the plans, and, most importantly, the taxpayers who are providing the funding for these plans.
A defined benefit plan that is properly funded and administered ensures stakeholders involved are getting a pension system that gets more value out of every dollar contributed (Fornia & Rhee, 2014). When a public sector employee is deciding on the organization a strong fully funded defined benefit pension plan enables the organizations recruiting these potential job seekers an easier time in attaining the highest skilled workforce and then retaining them (Westerman & Sundali, 2005). The other main issue involved with defined benefit pension plans is the startup and administrative costs, which research has shown a defined benefit pension plan is cheaper (Gabriel, 2007).
Defined benefit plans are not without their detractors and one of the primary arguments related to this issue is a defined contribution plan enables the employees in the organization to have more control over their retirement accounts (Jankowski, 1997). With the ability to control retirement accounts in a defined contribution plan this also enables another level of control for employees by allowing an employee to move from organization to organization when they feel it is time to try a new organization.
This is not an easy subject and is going to take work from all the stakeholders involved. The problem of the public sector pension systems will not go away overnight, but with sound decision making and further education on making informed decisions, it can be remedied. The way to remedy this situation is for employers to retain their defined benefit pension plans and adequately fund and administer them.
Keywords
Police--retirement, Retirement benefits