SUPPORT FOR 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, defined-benefit plans provide cost-of-living adjustments and pension formulas that are tied to the highest-paid years, which protect employees from inflation while they save throughout their working lives; and

WHEREAS, there is a movement to shift pension plans from defined-benefit plans to defined-contribution plans, which shift the risk from the employer to the employee, and this shift would be detrimental to public employees; and

WHEREAS, public employees should not have to choose between a defined-benefit pension plan and a defined-contribution pension plan:

RESOLVED, that the AFT support the continued use of defined-benefit pension plans as the main pension plan for all employees; and

RESOLVED, that the AFT support legislation that would ease portability restrictions within defined-benefit pension plans allowing for the portability of retirement accounts when an employee changes jobs.