Not for the state.  Exactly the opposite.  Making contributions in "now" money to employees' personal 401(k) accounts is IMMINENTLY more stable than promises for guessing on X amount 40 years in the future for an indeterminate number of payments.  It's night and day.  "Now" money is a known quantity, far easier to budget for, far easier to quantify.  So is SS.  

As for whether it's more or less expensive is simply a matter of what size benefit they choose to offer.