As stakeholders consider changes to the South Carolina Retirement System, it is important to understand the benefits that alternative retirement plan models can provide employees, employers and taxpayers.
This series of one-pagers aims to explain how a state can transition to a new retirement plan design, the ways that Senate Bill 176 meets defined contribution retirement plan best practices, and more. The series currently includes:
- How South Carolina Can Transition to a New Retirement Plan Design
- Does the Wealth Builder – Primary Retirement System Plan Meet Best Practices For Defined Contribution Plans?
- The Benefits of Expanding Choice for South Carolina’s Workforce
How South Carolina Can Transition to a New Retirement Plan Design
The concept of a “transition cost” when adopting a new retirement plan design for new hires is a myth. There is no legal requirement to increase debt payments in a transition to a new plan. When opening a new retirement plan—or providing a choice of plans— to new hires, policymakers must have a strategy in place to continue paying down legacy debts at either the existing or an accelerated pace to ensure long-term cost savings. Read more about how states can best offer new retirement plan design options in this one-pager.
Download the one-pager here.
Does the Wealth Builder – Primary Retirement System Plan Meet Best Practices for Defined Contribution Plans?
Industry experts say that government-sponsored defined contribution plans should set aside 10 to 15 percent of an employee’s annual income to provide adequate retirement income for the future. The Wealth Builder – Primary Retirement System plan proposed in Senate Bill 176 would exceed this standard and meet other best practices like. Furthermore, the Investment Plan does not provide adequate asset distributions and disability coverage options. Read more about how the WPRS plan would match up to industry gold standards in this one-pager.
Download the one-pager here.
The Benefits of Expanding Choice for South Carolina’s Workforce
States are increasingly moving away from one-size-fits-all pension systems and introducing choice-based retirement plans for new state and local workers. A number of states are offering a choice between a new guaranteed benefit plan like a traditional pension but structured to share and reduce risk between employers and employees to minimize pension underfunding or a new portable benefit plan, like a defined contribution retirement plan. Learn more about how choice-based plans could benefit South Carolina workers in this one-pager.
Download the one-pager here.
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