Since 1937, SERS has provided retirees, disability recipients, and beneficiaries with dependable income when they need it most. As times and economic realities have changed, SERS has worked responsibly with the state legislature to make sure the System remains stable and strong, and we will continue to work responsibly with the legislature to plan for the future. Click here to see our current pension reform recommendations.
As public employees for Ohio’s schools, SERS members are not eligible for Social Security benefits when they retire. Instead, our membership relies heavily on their SERS pension for retirement security. And, contrary to the perception that taxpayers are carrying the burden for the entire public employee pension tab, SERS members actually contribute 10% of their own salaries toward their retirement. This important fact is often ignored.
Recent reports from leading retirement research groups paint a bleak picture of the current state of retirement readiness in America. The 2009 National Retirement Risk Index prepared by the Center for Retirement Research at Boston College estimates that 51% of Americans are now at risk for not having enough income to maintain their pre-retirement standard of living. In addition, a book titled Living Longer on Less: The New Economic Insecurity of Seniors estimates that 4 out of 5 senior households do not have enough economic security to sustain them through their lives.
The bright spot in these reports is that defined benefit plans, such as SERS’ pension plan, prevent more people from becoming part of these statistics. Retirees who have defined benefit pensions are six times less likely to fall into poverty, which saves taxpayers $7.3 billion nationally every year in public assistance expenditures.
Ohio’s defined benefit plans also are important economically for the state. Last fiscal year, SERS paid out $939 million in benefits, almost all of which was returned to Ohio’s economy in the form of payments for groceries, health care, rents, mortgages, and other goods and services. For 72 years, SERS has been adequately funded, so we’ve never lacked funds to pay out benefits. Even after the current financial meltdown, we are still on course to be able to pay all of our pension promises many years into the future.
An area of concern for SERS is our health care program. Our latest actuarial report indicates that changes must be made or the health care fund will be depleted in FY2014. SERS’ Board and staff are committed to offering access to quality health care, and options will be presented to the Board in December. In January 2010, SERS will reconvene the Health Care Preservation Task Force and begin discussions with advocacy group representatives on ways to keep the health care fund solvent farther into the future.
Preserving and strengthening SERS’ defined benefit plan for the future is our top priority. Our members – administrative assistants, bus drivers, food service workers, librarians, maintenance personnel, teacher aides, treasurers, and other non-certified school employees who are vital to the operation of Ohio’s schools – as well as taxpayers, deserve nothing less.
Jim Winfree
Executive Director, School Employees Retirement System of Ohio
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