Tag: DB pension

Female crossing guard leads children safely across street

Abstract This paper investigates the impact of a Deferred Retirement Option Plan (DROP) on the age of retirement of employees covered by defined benefit pension plans provided by the City of Philadelphia. We show that the program results in significant and substantial increases in the age of retirement: 1.25 years on average for municipal employees…

Cropped view of police officer

The brief’s key findings are: Defined benefit plans based on final pay: “backload” benefits, so younger shorter-service employees get virtually nothing; favor those with high earnings growth, who tend to be higher paid; and invite sudden late-career “spikes” in earnings. Moving to career-average earnings would: provide reasonable benefits for younger shorter-service employees; treat high- and…