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. The 401(k) plan is the most popular form of defined contribution plan, although states and local governments may also 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.), two 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 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, either 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, North Dakota, Ohio and South Carolina .
Design Matters: The Influence of DC Plan Design on Retirement Outcomes, Defined Contribution Institutional Investment Association, July 2017
Using Auto-Enroll to Improve DC Plan Participant Outcomes, NAGDCA, July 2016
Public Sector Defined Contribution Plan Survey Report, NAGDCA, March 2015
Importance of Supplemental Retirement Savings Plans for City and County Employees, Center for State and Local Government Excellence, January 2015
Defined Contribution Plans in the Public Sector: Un Update, Center for State and Local Government Excellence, April 2014
Supplemental Retirement Plans Offered by City and County Governments, Center for State and Local Government Excellence, February 2014
The Evolving Role of Defined Contribution Plans in the Public Sector, Center for State and Local Government Excellence, September 2012