The pension commission suggested implementing a cash balance plan (per page 10 of the Roadmap):
Once the existing pension plans are frozen, new plans would be needed to provide employees with the means to earn future retirement benefits. The Commission believes that what is known as a “cash balance” plan provides the best model for the new plans. A cash balance plan is a hybrid defined benefit plan that expresses the employee’s benefit as an account balance that, as proposed by the Commission, grows by “pay credits” based on an employee’s salary, and by periodic “interest credits” based on the account’s balance and some defined measure of investment performance. Under the form of a cash balance plan envisioned by the Commission, an employee would be guaranteed both the contributions based on pay credits made to his or her account.
Design is all-important but if the idea is to have a flat percentage of salary as the “pay credit” it would solve the equity problem of participants close to retirement accumulating massive benefits but the biggest problem and source of all the coming misery remains.
The New Jersey retirement system is bankrupt primarily because politicians, abetted by actuaries, got to pick their contribution amounts. That would not change with a cash balance plan which is still a defined benefit plan that uses funding methods susceptible to manipulation.
All a switch to a cash balance defined benefit plan will do (as IBM employees learned) is curb outsized accruals for older employees which those employees might consider discriminatory (as may a Superior Court judge eventually).