| Pension Policy |
|Public pensions |
State public pension plans
Public pension health by state
Pension Terms and Definitions
Defined benefit plans provide employees a guaranteed lifetime retirement benefit based on an employee's years of service and salary. Although most statewide plans require employee contributions, the retiree's benefit is not tied directly to his/her contribution amount. The majority of public pension plans are defined benefit plans. In 2009, 84% of state and local workers had a defined benefit pension plan, compared to 21% of private-sector employees.
In defined contribution plans, both employers and employees contribute to the employees account. The employee determines how the contributions are invested, usually selecting from options presented by the plan administrator. At retirement, the amount of money in the fund is the basis of the employee's retirement benefit. The sponsoring public entity does not ensure a particular benefit amount, and usually does not provide post-retirement benefit cost of living increases.
The 100 largest public retirement systems in the U.S. had a combined $2.7 trillion in the first quarter of 2011, an increase of 3.6% from the start of 2011 and 10.2% above the first quarter last year, according to a U.S. Census Bureau report.
Currently, the nation’s largest public pension fund is the California Public Employees’ Retirement System (CalPERS), which holds $237.5 billion in assets for the year ended June 30, 2011.
Our membership figures divide plan participants into two broad categories: active and other. Active members are current employees contributing to the pension system. Other members include retirees, beneficiaries and other inactive plan participants (usually terminated employees entitled to benefits but not yet receiving them).
- "Public pension primer," State Budget Solutions, April 16, 2012
- "100 largest public pension plans' assets reach $2.7 trillion in Q1," Pensions & Investments, July 5, 2011
- California Pension Funds, Nation’s Largest, Gain Most in Decade, Businessweek, July 18, 2011
- Organisation for Economic Co-operation and Development, "Pensions Glossary," accessed November 27, 2013