Proactive Pension Management: An Elected Official’s Guide to Variable Benefit and Contribution Arrangements
A new report from the SLGE and AARP provides policymakers and stakeholders with an overview of the use of variable benefit and contribution arrangements in public pension plans. Under variable benefit and contribution arrangements, a pre-set formula drives occasional adjustments – increases or decreases – in retirement benefits and/or contributions to help maintain the long-term sustainability of the pension plan.
Such arrangements can add flexibility and create potential benefits for plans and beneficiaries alike, while preserving the underlying defined benefit pension system. The report also offers six case studies of variable arrangements implemented in Colorado, Iowa, South Dakota, Utah, Virginia, and Wisconsin.
This is the second elected officials guide AARP has produced with the Center for State and Local Government Excellence. The first, Understanding Public Pensions: A Guide for Elected Officials, provides an overview of public pensions and how they help to provide a secure retirement for the public sector workforce, including teachers, police officers, and firefighter. This new guide builds on the earlier report.
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