The Personal Retirement Optimization Plan (or PRO Plan) is a new framework for public worker retirement benefits that delivers post-employment security in a cost-effective way that is attractive for both employees and employers and provides a viable alternative to traditional public pension plan designs, which have proven vulnerable in many cases to underfunding and politicized decision making.
Built on a defined contribution foundation, the Personal Retirement Optimization Plan described fully in this new study improves on traditional designs with clear and measurable objectives on maximizing benefits for a wide range of individual situations, flexibility in both investment and benefit distribution options, and an emphasis on guaranteed lifetime income through annuities.
In short, the PRO Plan blends the risk management benefits to employers associated with DC plans with the lifetime income protections public workers value in pension plans. Executed correctly, the PRO Plan could provide a more secure DC benefit at a lower cost to governments and taxpayers.
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