Nebraska takes an approach to managing its public pension system that is unusual among the states. It does not offer its employees and legislators a traditional fixed-benefit pension or a health care plan when they retire.
Instead, Nebraska state employees hired since 2003 join what public pension analysts call a “cash balance” retirement plan, which includes features of both a traditional defined benefit pension and a 401(k)-style system. The hybrid plan is getting new attention from other states searching for alternatives to the decades-old defined benefit system whose cost is rising as Baby Boomers retire and pension portfolios recover from record losses during the Great Recession.
Kansas, Maryland, Montana and Pennsylvania lawmakers took a look this year at proposals shifting from traditional pensions to cash balance plans. Though none was approved, interest in cash balance systems continues because lawmakers looking to slash public pension costs are discovering that their preferred alternative — changing from a traditional defined benefit to a 401(k)-style plan — is initially too expensive or faces strong opposition from politically powerful labor unions.
Another good thing about Nebraska, I think, is that it is the only state with just one rather than two houses in its legislature (unicameral). I bet that way they get more done with less money.
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