State Pension Plans: Similarities and Differences Between Federal and State Designs
Released: 1999-03-19T00:00:00

Letter

Background

FERS consists of three parts: a DB component, a DC component with employer contribution, and Social Security. CSRS consists of two parts: a DB component and a DC component with no employer contribution. The DC component differs between FERS and CSRS. Under FERS, federal agencies automatically contribute an amount equal to 1 percent of salary to the Thrift Savings Plan (TSP) for each covered employee whether or not the employee contributes. In addition, the employer will contribute $1.00 for each $1.00 the employee contributes up to 3 percent of salary; and $.50 for each $1.00 the employee contributes on the next 2 percent of salary, for a maximum total employer contribution of 5 percent. FERS employees may contribute an additional 5 percent of salary with no employer contribution. The DC component in CSRS has no employer contribution; however, employees may contribute up to a total of 5 percent of their salary to the TSP and up to 10 percent of their salary to a separate voluntary contribution account. Except for certain employees who were rehired after December 31, 1983, employees in CSRS are not covered by Social Security through their federal employment.

State retirement programs vary widely—not only in their details but also because most jurisdictions have separate programs for special categories of employees, such as law enforcement officers, firefighters, teachers, and elected or judicial officials. Employees who do not fall into one of these categories are usually covered by a retirement system for general employees. In 1911, Massachusetts became the first state to develop a retirement program for general service state employees; and by 1947, every state provided retirement benefits.

In addition to Social Security benefits, employers may provide retirement benefits to their employees using two basic types of design components— DB and DC. Under a DB plan, employers bear the full responsibility for providing sufficient funding to guarantee that the benefits promised by the formulas will be paid. A DC plan differs in that there is no guaranteed annual benefit amount at retirement. Therefore, the employee bears the risk of whether the funds available at retirement will provide a desired level of benefits. Because employers may choose to offer a combination of these design components, that is—DB, DC with employer contribution, DC with no employer contribution, and Social Security—retirement programs can differ not only by the benefits they provide, but also by the design components they include.

Among the arrangements used by state governments to augment regular employee retirement plans are three DC plans authorized under the Internal Revenue Code at sections 401(k), 403(b), and 457(b). These DC plans are voluntary, supplemental, long-term retirement programs that give employees an opportunity to defer receipt of income until retirement or termination of employment. The key attraction of these plans can be the potential tax savings for employees. Income tax is generally deferred on contributions made to these plans and the associated earnings during an employee’s career. Taxes are due when the individual receives benefits from the plan, usually after retirement.

Scope and Methodology

To determine the numbers of state retirement programs open and available to general employees as of July 1, 1998, that included the same design components as FERS and CSRS, and what design components were included in the remaining state retirement programs, we obtained preliminary information from a database developed by the Public Pension Coordinating Council (PPCC) for its report, 1997 Survey of State and Local Government Employee Retirement Systems. We also obtained summary plan documents (e.g., employee handbooks and information brochures) for each of the 50 states and interviewed state retirement officials knowledgeable about the programs. We did not review the underlying statutes that set forth the specific provisions of state retirement plans. We relied on our prior work to identify the design components of FERS and CSRS, which we then used to categorize the state retirement plans.

On the basis of our prior work, we defined federal general employees as employees who were covered by FERS and CSRS, excluding those who were covered by special retirement provisions—notably law enforcement officers, firefighters, air traffic controllers, Members of Congress, and congressional staff. We defined state general employees as employees who were not classified as law enforcement officers, firefighters, legislative staff, or elected or judicial officials. We also excluded teachers in those states in which teachers were covered by different retirement plans than the ones that covered general employees.

As shown in table 2, we categorized state retirement plans according to the major design components found in FERS and CSRS—specifically DB, DC with employer contribution, DC with no employer contribution, and Social Security.

On the basis of the four design components shown above, we classified the states’ design components into six category types as shown in table 3.

Our approach was designed to provide the most up-to-date information (as of July 1, 1998) on the current design components and features of state retirement plans; however, it was not designed to provide information on some tiers of multitiered and/or closed plans that states also may be operating. We offset this limitation to some extent by describing the changes that have occurred in the design components of state programs since the programs were established. We also asked retirement officials in each state to confirm the accuracy of the information about their programs used in our report.

To describe the changes, if any, that have been made to the design of state retirement programs open and available to state general employees since the programs were established, what design changes states were considering, and the reasons for these changes, we interviewed cognizant state retirement officials. We used this information to determine what design components were previously available to state general employees, as well as those components that would be available if states made the changes they were considering.

To provide detailed information on the features of state retirement programs, we also used the database developed by PPCC to obtain specific data regarding eligibility, benefits, and contributions. As a supplement to the database, we reviewed state retirement program summary plan documents and financial reports, and/or we contacted state retirement officials. Plan profiles for each state are presented in appendixes I through VI. The profiles are grouped by type according to their design components and are preceded by summary data we selected to facilitate comparisons with FERS and CSRS.

We requested comments on a draft of this report from the Director, Office of Personnel Management (OPM). OPM responded that it had no comments. We did our review from February 1998 to March 1999 in accordance with generally accepted government auditing standards.

Few State Retirement Programs Had Exactly the Same Component Mix as FERS or CSRS

All of the 50 state retirement programs had two or more of the four design components but few of them had all of the same design components as FERS or CSRS. All states had a DC component, but only nine states contributed to the plan. A defined benefit component was included by 48 states and 43 states included Social Security coverage. A majority of states included three of the design components, but these were not the same components included in either FERS or CSRS. A total of nine states had exactly the same component mix as FERS or CSRS.

Of the nine states like FERS or CSRS, three—Minnesota, Missouri, and Oklahoma—had programs similar in design to FERS. These programs included a DB component, a DC component with an employer contribution, and Social Security. The other six states—Colorado, Louisiana, Maine, Massachusetts, Nevada, and Ohio offered retirement programs with the same design components as CSRS to their general employees. That is, these programs included a DB component and a DC component with no employer contribution.

The vast majority—35—of the states had retirement programs that included a DB component, a DC component with no employer contribution, and Social Security. The lack of employer contributions distinguished these programs from FERS, and the inclusion of Social Security coverage distinguished them from CSRS. The remaining six states offered retirement programs that included other combinations of the FERS and CSRS design components. For example, Indiana, Tennessee, and Utah had programs with a DB component, a DC component with employer contribution, a DC component with no employer contribution, and Social Security. Michigan and Nebraska had programs that included a DC component with employer contribution, a DC component with no employer contribution, and Social Security. Alaska had a retirement program with a DB component, a DC component with employer contribution, and a DC component with no employer contribution.

All States Made Design Changes to Their Retirement Programs Since They Were Established

All states have in some way changed the design components of their retirement programs since the programs were established. For the most part, developments in federal law that might enhance employee benefits prompted these changes—notably, the extension of Social Security eligibility to state employees in the early 1950s and the adoption of tax provisions beginning in the 1970s allowing state employees to contribute on a pretax basis to a DC plan.

The vast majority, or 44, of the states provided Social Security coverage after it became available to state employees. Of these states, 43 had provided Social Security coverage by the late 1950s; the last state to add Social Security did so in 1969. Alaska discontinued its Social Security coverage in 1980 after state employees elected to add a DC component with employer contribution to the state’s retirement program. Thus, 43 states currently provide Social Security coverage to their employees. Six states have never added Social Security coverage to their retirement programs.

States began establishing deferred compensation plans—voluntary DC plans—to augment their retirement programs in 1972. By 1978, when Congress passed Public Law 95-600, which created a statutory basis for Section 457 of the Internal Revenue Code, almost half of the states had a voluntary DC plan. By 1988, all states had voluntary DC plans available to state employees. Although most state employers did not contribute to these plans, as of July 1998, five states did provide an employer contribution. Table 4 shows the design component changes states have made since their retirement programs were established.

Recently Considered Design Changes to State Retirement Programs

According to state retirement officials, design component changes under discussion by one or more states during their last legislative sessions included (1) discontinuing the DB plan and establishing a DC plan, (2) adding a DC component to the DB plan, (3) adding an employer contribution to the employee’s voluntary DC plan, and/or (4) adding Social Security coverage.

Of the 48 state retirement programs with a DB component, officials representing 21 states told us that they had considered dropping their DB component in favor of a program consisting of a DC component with an employer contribution and Social Security. As shown in table 5, reducing government costs, enhancing portability, and/or lobbying by special interests or group(s) were among the reasons cited for considering such a change. However, no such change was made by these states during their last legislative sessions. Only one state had made this change in recent years. In 1997, Michigan modified its retirement program in this way, which Michigan officials said was done largely as a means of reducing government cost.

The most common reasons officials cited for their states not making the change to a DC plan during their past legislative sessions were that (1) studies done by the states showed there was no need to change, (2) further study was needed, (3) the state’s labor unions opposed the change, and/or (4) there was a lack of interest or support. Table 6 shows the reasons state retirement officials gave for not adopting a DC plan.

Officials representing the remaining 27 state retirement programs with a DB component told us that their states had never considered dropping the DB component. The most common reasons state officials gave for not considering the change from a DB to a DC plan were that (1) the DB component provided greater benefits, including survivor and disability benefits; (2) they regarded the DB plan as a better way to retain employees; and/or (3) there was little or no support for the change. Table 7 shows the states that had not considered changing their current retirement plans to a DC plan and the reasons why a DC plan had not been considered.

We are sending copies of this report to Senator Fred Thompson, Chairman, and Senator Joseph I. Lieberman, Ranking Minority Member, Senate Committee on Governmental Affairs; Representative Dan Burton, Chairman, and Representative Henry A. Waxman, Ranking Minority Member, House Committee on Government Reform; the Honorable Janice R. Lachance, Director, OPM; and other interested parties. Copies will also be made available to others upon request.

Major contributors to this report are listed in appendix VII. Please contact me on (202) 512-8676 if you have any questions concerning this report.

Type I Plans: Selected Features and Plan Profiles

Type I plans include three design components: DB, DC with employer contribution, and Social Security. These components are similar to the components found in the Federal Employees’ Retirement System (FERS).

The appendix consists of a summary of key features that we selected to facilitate comparisons with FERS and an individual profile for each state plan we categorized as Type I.

Age 65 with 3 years of service if born before 1943; age 66 with 3 years of service if born in 1943 or later Minimum age of 50 (Rule of 80)No minimum age (Rule of 90)

Table I.2: FERS: Provisions of the Federal Employees’ Retirement System General design and features of plan Defined contribution (DC) with employer contribution Year Social Security coverage was provided Number of years to vest in DB component Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Not applicable Table I.3: Minnesota: Provisions of the Minnesota State Retirement System – General Employees’ Plan General design and features of planProvision provided Defined contribution (DC) with employer contribution Year Social Security coverage was provided Number of years to vest in DB component Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Table I.4: Missouri: Provisions of the Missouri State Employees’ Retirement Plan General design and features of plan Defined contribution (DC) with employer contribution Year Social Security coverage was provided Number of years to vest in DB component Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Not applicable Table I.5: Oklahoma: Provisions of the Oklahoma Public Employees’ Retirement System General design and features of plan Defined contribution (DC) with employer contribution Year Social Security coverage was provided Number of years to vest in DB component Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Type II Plans: Selected Features and Plan Profiles

Type II plans include two design components: DB and DC with no employer contribution. These components are similar to the components found in the Civil Service Retirement System (CSRS).

The appendix consists of a summary of key features that we selected to facilitate comparisons with CSRS and an individual profile for each state plan we categorized as Type II.

Benefit formula 1.5% X FAS X years (first 5 years), 1.75% X FAS X years (next 5 years), 2.0% X FAS X years (years over 10)

Are survivor benefits provided after retirement?

Are disability benefits provided?

Are members required to contribute?

Table II.2: CSRS: Provisions of the Civil Service Retirement System General design and features of plan Design components Defined benefit (DB) Defined contribution (DC) with employer contribution DC with NO employer contribution Social Security Year Social Security coverage was provided Year original plan was established Eligibility Number of years to vest in DB component Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

5 Not applicable, no employer contribution Age 55 with 30 years of service, age 60 with 20 years of service, age 65 with 5 years of service Highest 3 years Not applicable. This is a federal plan.

How the post-retirement COLA is determined: Ad hoc at the discretion of the governing body Fixed rate from year to year Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Supplemental/auxiliary benefits Are survivor benefits provided after retirement?

General design and features of plan Is a “pop-up” provision included in the survivor’s benefit options?Are disability benefits provided? Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996? If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Type III Plans: Selected Features and Plan Profiles

Type III plans include three design components: DB, DC with no employer contribution, and Social Security.

The appendix consists of a summary of key features that we selected to facilitate comparisons with FERS and CSRS, and an individual profile for each state plan we categorized as Type III.

Table III.1: Selected Features of Type III State Retirement Plans as of July 1, 1998 10 years Immediate No minimum age (Rule of 80)

No minimum age (Rule of 88)

1.67% X FAS X years 60% X (years of service/30)

Immediate vesting at age 55.

Early retirement benefits

Are survivor benefits provided after retirement?

Are disability benefits provided?

Are members required to contribute?

No minimum age (Rule of 85)

Immediate vesting at age 65.

Unreduced annuity at 85 years of combined age and service.

Immediate vesting at age 65 while an active member.

Immediate vesting at age 60.

Immediate vesting at age 50 while working in a covered position.

Early retirement benefits YesYesYesNo

Minimum age plus service requirement for unreduced, normal retirement benefits No minimum age - Any age with 35 years of service No minimum age - Any age with 28 years of service No minimum age - Any age with 30 years of service Age 55 with 30 years of serviceNo minimum age (Rule of 80)No minimum age - Any age with 30 years of 5 yearsservice Age 55 with 30 years of service 5 years Age 65 with 5 years of service 5 years Age 55 with 25 years of service5 years Immediate Age 57 with 30 years of service 4 yearsNo minimum age (Rule of 85)

Vesting after 3 years at age 60.

Early retirement benefits

Are survivor benefits provided after retirement?

Are disability benefits provided?

Are members required to contribute?

Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

How the post-retirement COLA is determined: Ad hoc at the discretion of the governing body Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

How the post-retirement COLA is determined: Ad hoc at the discretion of the governing body Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially: required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

How the post-retirement COLA is determined: Ad hoc at the discretion of the governing body Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past five years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Type IV Plans: Selected Features and Plan Profiles

Type IV plans include four design components: DB, DC with employer contribution, DC without employer contribution, and Social Security.

The appendix consists of a summary of key features that we selected to facilitate comparisons with FERS and CSRS, and an individual profile for each state plan we categorized as Type IV.

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Type V Plan: Selected Features and Plan Profile

The Type V plan includes three design components: DB, DC with employer contribution, and DC without employer contribution.

The appendix consists of a summary of key features that we selected to facilitate comparisons with FERS and CSRS, and the state plan’s profile.

Benefit formula 2.0% X FAS X years of service for the first 10 years plus 2.25% X FAS X years of service for the next 10 years plus 2.5% X FAS X years of service for service greater than 20 years.

Does plan only include state general employees?

Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on investment performance Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Type VI Plans: Selected Features and Plan Profiles

Type VI plans include three design components: DC with employer contribution, DC without employer contribution, and Social Security.

The appendix consists of a summary of key features that we selected to facilitate comparisons with FERS and CSRS, and an individual profile for each state plan we categorized as Type VI.

Number of years to vest in employer’s contribution to DC component Age and service requirements for normal unreduced benefits Final average salary (FAS) calculation Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

General design and features of plan Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Does plan only include state general employees?

Minimum age and years of service for early retirement Cost of living adjustments (COLAs) Has the plan provided post-retirement COLAs in the past 5 years?

Variable rate based on the Consumer Price Index Is the COLA based on the “original” or “current” benefit?

Are survivor benefits provided after retirement?

Is a “pop-up” provision included in the survivor’s benefit options?

Does the plan allow for the purchase of service credits?

What was the actual employer’s contribution as a percent of covered payroll in 1996?

Was 100 percent of the employer’s actuarially required contribution actually contributed in 1996?

If no, what percent was actually contributed in 1996?

Major Contributors to This Report

General Government Division, Washington, D.C.

Larry H. Endy, Assistant Director, Federal Management and Workforce Issues Margaret T. Wrightson, the Division’s Associate Director of Tax Policy and Administration and Ernestine Burt-Sanders, Issue Area Assistant, also contributed to this report.

Dallas Field Office

Linda J. Libician, Assistant Director Tyra J. DiPalma, Evaluator-in-Charge Cleofas Zapata, Senior Evaluator James W. Turkett, Technical Advisor Jeffrey P. Kaser, Evaluator The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent.

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