DEFINED-BENEFIT PENSION PLANS

WHEREAS, defined-benefit pension plans provide a guaranteed lifetime income upon retirement, are advantageous to older and longer-term employees, and are almost universally used by public sector employers; and

WHEREAS, defined-contribution pension plans typically provide lump-sum payments upon retirement, are advantageous to younger and shorter-term employees, and are commonly used by those private sector employers that offer pension plans to employees; and

WHEREAS, employment in the public sector offers less opportunity for high remuneration. One of the offsetting advantages of career employment in the public sector has always been the superior benefits of the defined-benefit pension plans; and

WHEREAS, experienced, career-oriented public employees will become more valuable as the delivery of governmental services becomes more difficult with shrinking tax revenues:

RESOLVED, that the AFT support the continued use of defined-benefit pension plans in the public sector; and

RESOLVED, that the AFT will monitor statements and actions of public officials that indicate a desire to replace an existing defined-benefit pension plan with a defined-contribution pension plan.