The need to reform Ohio's State Teachers Retirement System won't go away

December 17, 2007

Ohio's State Teachers Retirement System (STRS) has serious problems that won't go away without fundamental changes to the system. The system, designed for an era when people worked in the same job for life, lived in the same community until retirement, and died in their 60s on average, is in need of serious modernization. Many teachers retiring in 2008 can expect to retire in their mid-fifties and collect pensions for as many years as they spent in the classroom, while the average American is looking at collecting Social Security at 65 and soon at 67. Not surprisingly, these demographic realities make STRS an increasing financial drain on school districts and on younger teachers - hence, a recent call in the Ohio House to increase spending by both (see here).

The system also is a disincentive to new teachers entering the system. In June 2007, a Fordham-sponsored analysis of the pension fund pointed out the challenges facing STRS and offered some ideas for reform. Additionally, this report (written by the economists Robert Costrell and Michael Podgursky) became the basis - expanding their Ohio work to a national perspective on the problem - of an Education Next article, a Barron's editorial, and an Education Week article.

As reported today by National Public Radio, STRS needs to be updated if Ohio wants to have a sustainable retirement system for public school teachers and attract and keep the

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The need to reform Ohio's State Teachers Retirement System won't go away