What exactly is the role of a taxpayer in funding a defined benefit plan for public employees?
The contributions to the pension fund — both from members and from employers — are part of the members’ compensation package paid in return for work performed. At the conclusion of the member’s career, this deferred compensation and investment returns earned by the pension system are used to provide pension benefits in lieu of Social Security. For taxpayers, this means they pay their portion of the pension obligation one time — through the initial compensation package that includes pension contributions. Taxpayers will not have to pay for support of public service workers again through the welfare system.
