Thursday, February 22, 2007

Utah considering giving state employees’ choice between defined benefit and defined contribution plans

Utah is another state wrestling with the type of retirement plan that will be offered in the future to state employees according to the Salt Lake City Tribune.

What appears to be a simple decision about state retirement benefits may turn out to be one of the thorniest issues of the 2007 Legislature.

House lawmakers are expected to vote this week on a bill that would give state employees a choice between defined benefit plans - the traditional pension system - and defined contribution plans - employee-stoked 401(k) plans.

To Rep. John Dougall, the bill's sponsor, giving public employees more say over their retirement is an idea whose time has come.

But of the roughly five dozen firefighters, teachers, law enforcement officials, state workers and other public employees who turned out for the hearing, not one volunteered to speak in favor of the bill.

Audry Wood, executive director of the Utah Public Employees Association, said public employees view Dougall's bill as a no-confidence vote on their work, and as a retreat from the state government's promise to reward their labors with a good, safe pension.

The Utah public employees' pension fund has grown to more than $17 billion, or nearly double the size of the state's annual budget. More than 163,000 people either contribute to it or draw from it - schoolteachers, judges, police officers, county clerks and even lawmakers and ex-governors.