The Center for Retirement Research at Boston College recently released a prelude to its multi-year study of state and local pension plans. This prelude discusses various aspects of state and local plans and attempts to identify the key differences between employer-sponsored plans in the private and public sectors. “The pension landscape in the public sector differs sharply from that in the private sector. State and local plans are primarily defined benefit, coverage is virtually universal, and only 70 percent of workers are in Social Security. In contrast, private plans are mostly 401(k)s, less than half of the workforce is covered, and everyone participates in Social Security. Public defined benefit plans tend to provide larger benefits than their private sector counterparts, and most offer post-retirement cost-of-living adjustments, which are virtually unheard of in the private sector. Public plans tend to rely more heavily on employee contributions, invest slightly more aggressively, and be about as well funded as their private sector counterparts.” Please click here for a copy of the entire study.