Why does STRS Ohio want to preserve its defined benefit pensions?
Unfortunately, defined contribution plans do not work well for the vast majority of Americans because they simply do not accrue enough to provide an adequate income during retirement years. For example, an Employee Benefit Research Institute (EBRI) brief issued in March 2010 documents that about 40% of all Americans have less than $10,000 saved for retirement. Another study done by the Center for Retirement Research (Boston College) in March 2009 shows that Americans age 55–64 had only $78,000 accumulated for retirement in their 401(k)/IRA accounts in 2007. After the market crash, the median amount for those approaching retirement dropped to $56,000. Individuals with well-run defined benefit plans are more prepared for retirement than those participating solely in defined contribution plans.
Related Questions
- Can you describe the survivor and disability protection that is offered under the STRS Ohio Defined Benefit and Combined Plans?
- Can you describe the optional health care coverage that is offered under the STRS Ohio Defined Benefit and Combined Plans?
- Is service credit applicable in the STRS Ohio Defined Contribution or Combined Plan options?
