Defined Benefit (DB) pension plans like CalSTRS are challenged by some as more expensive than 401 (k)-type individual defined contribution (DC) plans. A new report by the National Institute on Retirement Security (NIRS) finds DB programs are 46 percent lower in cost while providing the same level of retirement income as a DC.

A Better Bang for the Buck emphasizes three efficiencies of DB plans: (1) Avoids over-saving; (2) Stays forever young while members age; (3) Achieves higher investment returns.

CalSTRS remains one of the best performing investment portfolios among public and comparable pension plans across the nation. CalSTRS investment return ranked in the top one percent of public pension plans for fiscal year 2006-2007.

The report confirms that DB plans are the most fiscally efficient means of providing a modest but stable retirement income that cannot be outlived.

For more information on the report, a fact sheet, frequently asked questions and a simple PowerPoint summary go to www.nirsonline.org

CalSTRS is a member of NIRS. CalSTRS CEO, Jack Ehnes, is an NIRS board member.