Abstract
Statement of Problem
Defined benefit pension plans for private sector employees have been transitioning to defined contribution pension plans over the last 30 years. Some states have followed this trend to transition their public sector employee pension plans from defined benefit to defined contribution as well. California, a state currently offering defined benefit pensions to its employees, is in an economic position of growing deficit shortfalls and rising employer contribution rates. In the event California is unable to fulfill its fiduciary obligations, the state 's taxpayers will bear the full burden of following through. Should California follow suite with the private sector and other states that have made the switch, and shift its existing pension system? What is then the best route for California's taxpayers to pursue: a defined benefit plan, a defined contribution plan, or some other alternative?
Conclusions Reached
Outcome matrix analysis helped to reach the conclusion that California-'s taxpayers should pursue a hybrid model for the pubic pension system. Extensive comparisons of transition factors, advantages, and disadvantages of multiple policy options help support this recommendation.