Defined Contribution
A defined contribution plan is an employer-sponsored retirement benefit in which the employer provides a retirement savings vehicle for its employees, and also typically makes a contribution to the employee's retirement account. In a DC plan, employees are responsible for managing their retirement assets, including their investment and withdrawal. The 401(k) plan is the most popular form of defined contribution plan, although states and local governments may sponsor other types of DC plans, such as 401(a), 403(b), and 457 plans.
On a statewide basis for broad employee groups (i.e., not including legislators, judges, etc.), four states and the District of Columbia provide only a defined contribution plan to their workers: all newly hired employees in Alaska since July 2006; new state employees in Michigan since March 1997, general employees (not public safety officers or teachers) in North Dakota since 2025, and in Oklahoma since November 2015; and general employees (not teachers or public safety workers) in the District of Columbia, have only a DC plan as their primary retirement benefit.
Employees in many states have access to a DC plan, as part of a hybrid retirement benefit (see Hybrid Plans below), as a supplemental retirement savings plan, or as an optional alternative to the DB plan.
States where broad employee groups may participate in a DC plan as their primary retirement benefit, on an optional basis, include Colorado, Florida, Indiana, Montana, Ohio and South Carolina.
NASRA Resources
- Defined Contribution Plans Administered by State Retirement Systems or Available to State Employees, April 2025
Other Resources
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Automatic Enrollment and Automatic Escalation, MissionSquare Research Institute, October 2023
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Design Matters: The Influence of DC Plan Design on Retirement Outcomes, Defined Contribution Institutional Investment Association, July 2017
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Using Auto-Enroll to Improve DC Plan Participant Outcomes, NAGDCA, July 2016
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Public Sector Defined Contribution Plan Survey Report, NAGDCA, March 2015
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Importance of Supplemental Retirement Savings Plans for City and County Employees, Center for State and Local Government Excellence, January 2015
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Defined Contribution Plans in the Public Sector: Un Update, Center for State and Local Government Excellence, April 2014
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Supplemental Retirement Plans Offered by City and County Governments, Center for State and Local Government Excellence, February 2014
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The Evolving Role of Defined Contribution Plans in the Public Sector, Center for State and Local Government Excellence, September 2012