Source: Benefits Canada

When Alaska switched its public education employees from two defined benefit pension plans to a 401(k)-style defined contribution plan, more staff left their positions, according to a new report by the National Institute on Retirement Security.

The report benchmarks retirement benefit offerings among state-level plans in Alaska and nationwide, analyzing the evolution of public pension plans since the 2008/09 financial crisis.

In 2005, the Alaska legislature voted to close its two statewide DB plans for teachers and public employees in an effort to manage the unfunded liability. Since July 1, 2006, all new hires participate in DC plans. According to the report, the change had the unintended consequence of creating workforce recruitment and retention challenges for public employers.

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