Cash Balance Pension? New Ham & Eggs for UC?
There are folks out there who are convinced they have the solution for public pension plans in California and maybe the universe. They are pushing something called cash balance (CB) plans. These are in contrast to defined benefit (DB) plans, such as the UC basic pension, and defined contribution (DC) plans (which UC had until recently as a supplement). So let’s start with definitions. A DC plan means the employer puts in a particular contribution, say, a percent of pay each period. (There may be employee contributions, too, also defined. The UC version of DC had only employee contributions.) The…
