A working group appointed by Gov. Steve Beshear to study the state's public pension system declined to recommend moving new state workers into a 401(k)-type retirement plan.
"I think that what has occurred in the markets certainly puts some sobering issues on the table that have to be addressed if you are seriously thinking about putting a defined contribution plan in place," said Gary Harbin, executive director of the Kentucky Teachers' Retirement System.
While 48 states, including Kentucky, offer a defined benefit plan as the primary source of employee retirement income, private companies have been dumping them in favor of 401(k) plans.
The report concluded that a defined contribution plan would not reduce or eliminate the retirement systems' $27 billion shortfall.
The subcommittee also found that the state can deliver the same retirement benefits through a defined benefit plan at about half the cost of a defined contribution plan.
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