From John Curry, January 11, 2010
Toledo Blade, January 11, 2010
Public plan is good for Ohioans
Defined-benefit pensions such as the one provided via the State Teachers Retirement System examined in The Blade's Jan. 3-4 series, "Set for Life," are the best deal for Ohio taxpayers. According to the National Institute on Retirement Security, defined-benefit pensions can provide the same retirement income as defined contribution plans such as a 401(k) at 46 percent of the cost.
Employee contributions and investment returns fund approximately three-quarters of their lifetime retirement benefits. Educators are being asked to take responsibility for the lion's share of the adjustment necessary to adequately fund their pension system. Educators will be reducing their future benefits, increasing their contributions, and working longer to pay for the needed funding. Also, public sector retirees do not receive Social Security benefits.
Employers are being asked for a modest increase in their contribution to share the cost of maintaining a secure retirement plan. This investment will help maintain the solvency of a retirement plan that is an important tool in recruitment and retention of a high-quality workforce. By extension, taxpayers benefit from a high-quality educational system, which is mandatory for the economic success of Ohio.
William Leibensperger and Larry Lewellen
Healthcare & Pension Advocates for STRS
Upper Arlington, Ohio
Schools save with pension system
The Jan. 3-4 series profiling Ohio's public employee pension funds missed the mark. While the private sector pays into Social Security, school districts and teachers instead pay into the Ohio State Teachers Retirement System pension fund. The defined-benefit pension fund is the best deal for Ohio taxpayers. Private sector employers pay 16.75 percent and employees pay 10.55 percent for Social Security benefits and health insurance. STRS receives 14 percent from employers and 10 percent from employees to fund pension benefits and health insurance for retirees.
Simple math indicates the pension structure saves school districts millions of dollars while providing better benefits for employees.
Pension benefits support our local economy. In 2006, more than 357,000 Ohio residents received a total of $8.41 billion in pension benefits from state and local pension plans. According to a study by the National Institute on Retirement Security, every dollar paid to a retiree in benefits returns $1.33 to the Ohio economy as those retirees spend that money.
The STRS pension fund is well-managed and sustainable. The current economic downturn is primarily responsible for the investment losses in the state pension plans. In the final analysis, public pensions save taxpayers money and strengthen the state's economy.
Editor's note: The writer is a teacher at Toledo Technology Academy.