Schwarzenegger pension revolt.(Arnold Schwarzenegger)(Editorial)

Pensions & Investments, January, 2005

Gov. Arnold Schwarzenegger's charisma might induce California voters to adopt his proposal to move new public employees to a defined contribution plan and end, through attrition, public defined benefit plans in the state. But no decision on such a dramatic move should be made without thorough study and discussion.

The taxpayers and legislators need to examine the ramifications of his proposal from all perspectives. Yes, defined contribution plans may appear to be less expensive than defined benefit plans, but if they provide equivalent benefits, are they? Yes, defined contributions plans reduce the volatility of the contribution stream, but do they not, in effect, pass it on to the employees? There is nothing charismatic about pension issues, except...

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