Damon Asbury, Letter to Columbus Dispatch: Defined benefit plans a worthy role model for all

Columbus Dispatch, January 3, 2008
Retirees deserve well-run benefit plan

The Dec. 26 Dispatch editorial "Pennies not saved" stressed the importance of young workers saving for retirement — and the need for education about available savings options. We couldn’t agree more, and we include information about the options available to young teachers, including 401(k) plans and Ohio’s Deferred Compensation Program, in our member-education workshops.

However, the editorial also noted "the day of the defined-benefit plan has passed." We do not believe that is true. In fact, we believe the retirement security provided by well-run defined-benefit plans can serve as a worthy role model for retirement planning for all Americans. Defined-benefit plans reduce the chance that there will be future generations of poor, elderly retirees who have outlived their savings and subsist only on Social Security (if eligible) supplemented by public assistance, charities and assistance from their families.

Employees and their employers fund a defined benefit plan during their working careers; investment earnings account for about 70 percent of the remaining pension-fund revenue.

The Dispatch is correct that saving for retirement is important. Having a retirement plan that includes a defined-benefit component and individual savings is an even better approach to ensure retirement security.

DAMON F. ASBURY
Executive director
State Teachers Retirement System of Ohio
Columbus