States and municipalities are adding defined contribution plans to their retirement programs largely because of the fund and insurance industries' intense lobbying and despite the fact that there is virtually no demand for the option from state employees, said pension plan and public sector executives.

"Most defined-benefit plans are well funded and there hasn't been an outcry from public employees for defined contribution plans," said Cathie Eitelberg, national director of public sector markets for the Segal Company, a benefits consulting firm based in New York. "Typically, vendors bring about the change (in policy). If you talk to participants, generally they prefer to stay in the defined benefit camp."

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