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An interesting and growing phenomenon among State and local government workers is the availability of defined contribution plans that allow employees to defer taxes on their contributions but do not provide any employer contributions.
Technically, these plans are defined contribution plans, but because they do not include employer funds, the NCS distinguishes these plans from more traditional defined contribution plans. Employers process payroll deductions and forward funds to an investment company, but these plans are often administered by the investment company independent of the employer. Often employees have a choice of many companies to administer their plan and invest their contributions. This differs from traditional defined contribution plans with employer funds, which are typically administered by the employer.
Among all State and local government workers, 54 percent had access to an employee-contribution-only plan in March 2008. Thirty-five percent had access to a defined benefit plan with an employee-contribution-only plan and 14 percent had access to both a traditional defined contribution plan and an employee-contribution-only plan.
Totally, 92 percent of State and local government workers had access to some type of retirement plan in March 2008.
These data are from the BLS National Compensation Survey. To learn more, see The Structure of State and Local Government Retirement Benefits, 2008, by William J. Wiatrowski, Compensation and Working Conditions Online, February 2009.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Employee-contribution-only retirement plans and State and local government workers at https://www.bls.gov/opub/ted/2009/mar/wk2/art04.htm (visited March 20, 2023).