Fewer Americans enjoy the benefits of a pension in retirement. The recession wiped out so much invested wealth, enough of it earmarked for public workers’ pensions, that states fell much further behind in funding them. A period of transition continues, with state and local governments switching more workers to 401k style retirement plans.
Unlike pensions, those plans do not guarantee a particular sum at retirement, merely a defined contribution while employed.
Dan Liljenquist, a nationally-acknowledged advocate of 401k style “defined contribution” retirement plans, led just such a reform effort while a State Senator in Utah. Since then other states, including Michigan, have passed similar reforms.
Liljenquist visits Lansing today to talk about this transition for the Mackinac Center for Public Policy. He tells Current State that as recently as last summer, the 50 states’ unfunded retirement liability was between $730 billion and $4.4 trillion.