If politicians aren't ready to take action on improving the retirement situation in this country, MIT is.
The Golub Center for Finance and Policy at the Massachusetts Institute of Technology is launching a contest to come up with strategic proposals that could make retirement plans better for public-sector workers. In fact, they're putting their money where their mouth is: a $20,000 prize is up for grabs for winners "who propose the most well-reasoned, prudent and implementable strategies."
The contest is open not just to financial advisory professionals, but also to students, academics, pension fund managers and experts in asset-liability management.
Considering that the drop in defined benefit plans and the rise of defined contribution plans in the private sector has led to a rising number of workers who are ill prepared for retirement, the contest seems like a good idea — particularly since the persistence of DB plans in the public sector may not be all that secure.
Such plans have their own troubles, including unfunded liabilities for state and city pension plans. Says MIT, "[T]he shortfall between the present value of plan assets and future benefits owed … is estimated to exceed $5 trillion."
