A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

In the past two decades, several states have closed their defined benefit (DB) pension plans to state and local government employees and moved those workers to defined contribution (DC) plans like 401(k)s instead. But some of those states are now considering reversing course as they recognize the value of DB plans in recruiting and retaining qualified workers.



Alaska closed its DB plan to new state employees in 2006 over concerns about the plan’s unfunded liability. Since then, the state has struggled to hire and keep teachers, state troopers and other public employees. Those workers often receive their training and then leave for other states that offer better retirement benefits, <a href="https://www.alaskasnewssource.com/2022/02/04/facing-retention-crisis-alaska-legislature-considers-more-generous-first-responder-retirement-scheme/" target="_blank" rel="noreferrer noopener">according to officials</a>. And that frequent turnover can have a high cost: It costs nearly $200,000 to recruit, train and certify a single state trooper, <a href="https://dps.alaska.gov/getmedia/ca76d118-d1ca-43c4-85be-49600a4fb8d0/Recruitment-Retention-Plan-Overview-2018-2023" target="_blank" rel="noreferrer noopener" class="broken_link">according to a report</a> from the Alaska Department of Public Safety.



Alaska’s lawmakers <a href="https://www.ktoo.org/2022/04/04/alaska-legislators-consider-reviving-pensions-for-public-employees/" target="_blank" rel="noreferrer noopener">are now considering legislation</a> that would reopen the DB plan and thereby reduce the high costs associated with turnover and constantly hiring and training new employees.



It’s a similar situation in Oklahoma, which shifted some of its state employees to a DC plan in 2014. Its legislature <a href="https://www.ocpathink.org/post/house-votes-to-roll-back-oklahoma-pension-reforms" target="_blank" rel="noreferrer noopener">is also considering reversing course</a> and putting those workers back on a DB plan.



Pensions have long been seen as a valuable tool to help hire and keep teachers, state employees and other government workers, since most private employers do not offer DB plans and the reliable source of retirement income that comes with them. Research also shows that amid widespread concerns about retirement security, Americans from every generation <a href="https://peraontheissues.com/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">value defined benefit pensions</a> and believe every worker should have access to one.



States like Colorado provide strong evidence that defined benefit plans continue to help attract and retain teachers and other public employees. According to <a href="https://www.nirsonline.org/wp-content/uploads/2019/01/Teacher-Pension-vs-401ks-in-Six-States_FINAL.pdf" target="_blank" rel="noreferrer noopener">research from the National Institute on Retirement Security</a>, 65 percent of teachers in Connecticut, Colorado, Georgia, Kentucky, Missouri and Texas — all of which offer DB plans — serve for at least 20 years.



<h2 class="wp-block-heading">Colorado’s commitment to PERA</h2>



Over the past decade-plus, Colorado lawmakers have indicated they remain committed to strengthening PERA so the state’s public workers can continue to rely on a defined benefit pension for retirement security.



In 2010, the Colorado General Assembly passed <a href="https://content.copera.org/states-consider-reviving-closed-pensions-in-effort-to-recruit-retain-public-workers/" target="_blank" rel="noreferrer noopener">Senate Bill 10-001</a>, which contained a number of reforms to improve PERA’s funded status and sustainability, with a focus on preserving the Defined Benefit Plan. Five years after SB10-001, the state <a href="https://peraontheissues.com/poked-prodded-and-perused-pera-passes/" target="_blank" rel="noreferrer noopener">commissioned a study</a> to compare PERA with other plan types, such as defined contribution plans. That study concluded PERA’s hybrid defined benefit plan was the most cost-effective, efficient plan available, and provides more income at retirement than the alternative plan designs for all ages and career paths. Another package of reforms then followed in 2018 with <a href="https://leg.colorado.gov/bills/sb18-200" target="_blank" rel="noreferrer noopener">Senate Bill 18-200</a>.



Changes resulting from those two pieces of legislation include increased member and employer contributions, reductions in the Annual Increase paid to benefit recipients, introduction of the <a href="https://content.copera.org//wp-content/uploads/2025/06/Automatic-Adjustment-Provision.pdf" target="_blank" rel="noreferrer noopener">Automatic Adjustment Provision</a> and a direct distribution from the State budget of $225 million, to be paid to PERA annually. While the legislature opted to forgo 2020’s payment due to unprecedented pandemic-related budget cuts, <a href="https://peraontheissues.com/2022-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">efforts are underway</a> to make up that payment.



While the changes to member and employer contributions and Annual Increases haven’t been easy, they ensure that PERA’s Defined Benefit Plan will be able to continue providing reliable retirement income that retirees can’t outlive.



Ensuring that PERA is sustainable allows school districts, local governments, public safety departments and other government agencies to continue to attract highly qualified, skilled employees and retain their expertise for years to come.

States Consider Reviving Closed Pensions in Effort to Recruit, Retain Public Workers