2011.09.14 Russ Griggs: What you don't hear about retirement
Earlier this month, the Buckeye Institute issued a report entitled, “Taxpayers on the Hook: Taxpayer Contribution Rates for Ohio Government Pensions Outpace National Averages.” The report claimed that the Ohio Teacher Retirement employer rate (the part the board pays) was ninth highest out of the 34 states with teacher retirement programs. The Report left out the fact that 22 of those states contribute to Social Security in addition to teacher retirement plans.
Ohio teachers do not belong to Social Security. They contribute 10 percent of their earnings to the state system, STRS. Combined with the 14 percent paid by the school board, as part of their compensation, adds up to 24 percent going into their retirement plan. Social Security members pay less than half that amount, and their employers pay less than 50 percent, soon to be further reduced.
When you compare Ohio to other states with retirement plans, not participating in Social Security, Ohio is 20th out of 34 states, being well below average. Of the 22 states with both Social Security and retirement systems, 18 are above the 14 percent paid in Ohio. It takes more than modern math to make 20 out of 34 and 18 out of 22 above average. (Unless you hold the chart upside down)
I started teaching in Maryland in 1974. My starting pay was twice what teachers were starting at in Ohio. During my entire career I made significantly less than educators in Michigan and Pennsylvania. The difference was Ohio having a retirement system that invested a much greater percent of my compensation resulting in a much better retirement.
STRS has recommended changes to the legislature to keep the system solvent for many years to come. Can the same be said of Social Security?
(Statistics above are from the Ohio State Retirement System)
– Russ Griggs
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