New Research Offers Comprehensive Guide on Public Sector Hybrid Retirement Plans
The National Institute on Retirement Security Hosts a Webinar on May 12 at 2 PM to Review Research
WASHINGTON, D.C., May 10, 2021 – A new report provides a comprehensive overview of the many aspects of public sector hybrid retirement plan designs. The report finds that some shifts to hybrid designs were made without a proper evaluation of the long-term implications of the plan changes. In contrast, other hybrids are well-thought-out and more likely to provide retirement security to employees, enabling public employers to recruit and retain a qualified workforce.
The Hybrid Handbook |Not All Hybrids Are Created Equal, released today by the National Institute on Retirement Security (NIRS), is co-authored by Dan Doonan, NIRS executive director, and Elizabeth Wiley, Cheiron consulting actuary.
Hybrid retirement plans for state and local employees are not new, but these plan designs have received increased attention in recent years as some jurisdictions have sought to modify workforce retirement benefits.
“This report provides an overview of the many aspects of hybrid plan design so that state and local officials can make informed decisions if considering modifications to public employee retirement benefits to some type of hybrid model.” said Dan Doonan, NIRS executive director and report co-author.
“We know that public employees place a high value on their retirement benefits, and a move in the wrong direction on benefits could be a detriment to hiring and retaining the public workforce. Our bottom line finding – not all hybrids are created equal, which makes it critically important to examine the details of hybrid plan designs,” Doonan explained.
A hybrid is not one particular plan design, but instead is an umbrella term capturing a wide range of different plan designs. Some hybrids are defined benefit (DB) pensions with risk-sharing provisions, while others blend attributes of DB and defined contribution (DC) plans. Each of these plan designs offers tradeoffs in terms of retirement benefits, risks, and costs.
The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org. Follow NIRS on Twitter @NIRSonline.