The state should ensure that pension systems are neutral, uniformly increasing pension wealth with each additional year of work.
Alaska provides a defined contribution pension plan for teachers. In a defined contribution plan, benefits are based on employee and employer contributions plus investment earnings or losses earned by those contributions, rather than on a benefit formula. Therefore, the state's plan is neutral, with pension wealth accumulating equally for all teachers for each year of work.
State of Alaska Teachers’ Retirement System, Actuarial Valuation Report as of June 30, 2015.
Alaska was helpful in providing information that enhanced this analysis.