Faculty choice of a pension plan: Defined benefit versus defined contribution

Worker preferences between defined-benefit and defined-contribution pension plans are estimated using a sample of faculty members at North Carolina St ate University. Newly hired faculty must decide between the state retiremen t plan (a final pay, defined-benefit plan) and one of three defined-contrib ution plans (TIAA/CREF, VALIC, Lincoln National). This analysis allows the authors to estimate the choice of a pension plan holding constant the place of employment. The study uses both university employment records and a fac ulty survey to examine the factors that determine the choice of a pension.