Republican control of state governments is the most significant factor in their creation of defined contribution plans, according to a new study co-written by Alicia H. Munnell, the Peter F. Drucker professor of management sciences at Carroll School of Management at Boston College and director of its Center for Retirement Research.
The impact of Republican control of state government “is larger and more robust than any of the other factors” such as underfunding, wrote Ms. Munnell and the other co-authors, all from CCR — Alex Golub-Sass, research associate, Kelly Haverstick, research econo¬mist, and Maur¬icio Soto, senior research associate. “Introducing a defined con¬tribution plan when Republicans control the state governorship and legislature is consistent with their political philosophy of individual responsibility for retirement savings,” they wrote in the 16-page study.
Twelve states now have some form of defined contribution plan, the study said. Of them, only Alaska and Michigan switched to only a mandatory defined contribution plan for new employees. Indiana and Oregon have a mandatory DC plan combined with a DB plan. The remaining states — Colorado, Florida, Montana, North Dakota, Ohio, South Carolina, Vermont and Washington — offer choices that include either plans or both. — Barry B. Burr