Ohio Teachers Agree to Retirement Age Increase to Keep Pensions

Posted in Financial News , Retirement • January 29, 2011

While deciding what retirement age is appropriate based on economic struggles and a lack of retirement funds has been a major nationwide issue, teachers in Ohio have decided to take matters into their own hands to save their pensions. On Thursday, the State Teachers Retirement System board approved a number of changes to their benefit program, one being that the minimum retirement age would be set at 60.

Ohio Teachers’ Pensions Were In Danger

After two years of debating over how to save teachers’ pensions in the state, the board agreed to a host of changes to the benefit program, including requiring Ohio public school teachers to:

  • Pay a larger share of their retirement costs (13 percent)
  • Work until they’re 60 with 35 years of service, as opposed to retiring at any age with 30 years of service
  • Cut pension benefits to 77 percent of their final average salary
  • Cut cost-of-living increases
  • Increase their service requirements in order to qualify for retirement benefits

Board spokeswoman Laura Ecklar explained that without the package, the pension fund would have had a very difficult time making payments in the future.

Retirement Benefits in Question Nationwide

In the case of the Ohio teachers, the money paid into their pension plans will mean they won’t need to pay into Social Security, but those who do pay into Social Security have the same worries the teachers have faced due to a dwindling fund.

On Thursday, Business Week reported the Social Security fund is set to run out of money by 2037–only 26 years away. But the problems don’t begin there.

This year alone, Social Security will collect $45 billion less in payroll taxes than it pays out in benefits, largely due to Baby Boomer retirees. The Congressional Budget Office expects this pattern to continue until the fund is completely drained.

Like in the case of the Ohio teachers’ fund, government officials have considered increasing the retirement age, but so far, no concrete solutions have been proposed.

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We would love to hear your comments and feedback

  • John

    Dear GoBankingRates,

    You don’t inform your readership of the fact that people who pay into Social Security weasel out of paying Social Security deductions on any monies they make each year over the $106,800 and so….millionaires and billionaires (like Bill gates) don’t pay their fair share to Social Security…if they did, Social Security would be solvent forever. Once again, the working poor take it in the ear. Sad thing is, most of the “working poor” aren’t even aware of the $106,800 ceilinig.

  • Donnie

    Yes. But will Bill Gates draw out his fair share? Bill will only draw out what he has put in. Now, if you are wanting Bill Gates to put in his share and then some of yours well, that’s another bag of tea. I don’t consider Bill Gates WEASELING his way out of anything. I consider folks whom draw out more than they have ever put in to be the weasles. JMHO.

  • ME

    Maybe Bill could pay more into social security for John and in return John could work for Bill without a paycheck?

  • Chato

    This is the reason why the majority of Americans do not like Republicans. They are unrealistic people who only particular about their vested interest and not of the common people. Keep the heat going on. Put more pressure on the wealthy and its leaders. Why not they be the first to reduce their salaries and pensions and retirements.

  • LS

    pressure on the wealthy…first they work hard to get where they are, they save and they don’t spend on every stupid little knick knack like those who are not so wealthy, they invest early on and take care of themselves. You want a handout well then you aren’t going to get much and I certainly don’t appreciate your laziness. Either you work hard, save your money, live WITHIN your means, and you will have more and you won’t be at the mercy of social security. No one should be planning to retire and live on social security. I may make a little more money, but I work hard and I don’t spend every penny on fancy vacations and house/car that isn’t affordable. So why should I pay for someone who squanders

  • mell

    The teachers won’t make it to 60. The movement is to replace older teachers with cheaper more temporary minded young teachers under the guise that they are smarter, more hardworking and willing to become de facto 2nd parents to all the black and hispanic kids that make up the vast majority of school failures and dropouts. Teachers have already had their social security money stolen from them by the federal government and now they must work longer to get their hands on their OWN money. If you are thinking of becoming a teacher- DONT DO IT. America hates teachers and education- long live entertainmnet!!!!

  • Darryl

    Remove the cap on Socaial Security. Won’t cure the problems of the system, but it will sure bring it close to being solvent again. But, you cannot blame the workers for the cap – they do not “weasel” out of paying. The politicians set it up that way and the cap has been raising virtually every year – so why not remove it totally? It seems unfair for some to pay the tax on 100% of thier salaries while others only pay on a portion of it.

  • Joe

    I am a teacher. I am also a independent. Those of you on the right and the left please stop the “class-warfare” and talking points. The only thing that will save teaching-is vouchers. I said it. I am not afraid of competition. Give the parents money to send their children to schools and teachers that produce results. Catholic, private or otherwise. Those of you who are teachers hear me out. I sit in the union meetings and have people from the NEA telling me how to vote. I am almost 50 and I have seen public schools get worse and worse. With vouchers teachers and schools will no longer have to deal with students who are only there because they have to be-schools can get rid of problem students. Competition. It’s time.

  • Pingback: Schadenfreude. | Taking down Obama’s Socialist Unions!

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