Chicago Proposes 401(k) Accounts for Transit
A groundbreaking effort to switch a public employee pension system from a defined benefit plan to a defined contribution plan is underway in Chicago.
The Chicago Transit Authority wants to follow a growing trend in the private sector toward a 401(k)-type retirement system in which the employer and employee make regular contributions into a retirement account controlled by the employee. Supporters say this approach can save taxpayers money while still providing solid retirement income for state workers.
A CTA spokeswoman said Chicago Mayor Richard M. Daley, the state’s most powerful Democrat, has signed on to the retirement restructuring.