Opinion: The real fix for state pension woes: ditch defined contribution pensions
, but they have one common element important to taxpayers. That is, the financial obligation of the employer is complete at the end of each pay period.
Another big advantage to defined contribution plans is their portability, especially in a changing workforce where employees change jobs frequently. In a comprehensive policy paper published in 2020 by the Reason Foundation, “Defined Contribution Plans: Best Practices in Design and Utilization,” the authors contend that, “When structured properly, [defined contribution] retirement plans—plans with individually controlled investment accounts with contributions made by both employers and employees—can offer governments an approach to retirement plan design that garners retirement security for employees while actively working.
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