TY  - JOUR
AU  - Clark, Robert L
AU  - Morrill, Melinda S
AU  - Vanderweide, David
TI  - Defined Benefit Pension Plan Distribution Decisions by Public Sector Employees
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18488
PY  - 2012
Y2  - October 2012
DO  - 10.3386/w18488
UR  - http://www.nber.org/papers/w18488
L1  - http://www.nber.org/papers/w18488.pdf
N1  - Author contact info:
Robert L. Clark
Poole College of Management
Box 7229
North Carolina State University
Raleigh, NC 27695
Tel: 919/515-4568
Fax: 919/515-6943
E-Mail: robert_clark@ncsu.edu

Melinda S. Morrill
Department of Economics
North Carolina State University
Campus Box 8110
Raleigh, NC 27695-8110
E-Mail: melinda_morrill@ncsu.edu

David Vanderweide
Fiscal Analyst
Fiscal Research Division
North Carolina General Assembly
Raleigh, NC  27601
Raleigh, NC
USA
E-Mail: david.vanderweide@ncleg.net
M1  - published as Robert L. Clark, Melinda Sandler Morrill, David Vanderweide. "Defined Benefit Pension Plan Distribution Decisions by Public Sector Employees," in Robert Clark, Joshua Rauh, and Mark Duggan, editors, "Retirement Benefits for State and Local Employees: Designing Pension Plans for the Twenty-First Century" Elsevier, Journal of Public Economics, vol. 116  (2014)

M3  - presented at "State and Local Pensions Conference", August 17-18, 2012
AB  - Studies examining pension distribution choices have found that the tendency of private-sector workers is to select lump sum distributions instead of life annuities.  In the public sector, defined benefit pensions usually offer lump sum distributions equal to employee contributions, not the present value of the annuity.  Using administrative data from the North Carolina state and local government retirement systems, we find that over two-thirds of public sector workers under age 50 separating prior to retirement from public plans in North Carolina left their accounts open and did not request a cash distribution from the pension system within one year of separation.  Furthermore, the evidence suggests many separating workers, particularly those with short tenure, may be forgoing important benefits due to lack of knowledge, understanding, or accessibility of benefits.  In contrast to prior research in the private sector, we find no evidence of a bias toward cash distributions for public employees in North Carolina.
ER  -