Ohio Council 8 President John A. Lyall leveled strong criticism on recent reporting about Ohio’s public pension systems.


A feature run by eight newspapers across the state glossed over or ignored important factors affecting public pension plans.  

The following letter, which sets the record straight on public pensions, was sent to several of the newspapers, and to date, has appeared in the Toledo Blade.  

Dear Editor,

Every Ohioan has a stake in understanding the challenges facing our state’s public employee pension system. Sadly, the Dispatch’s recent feature “Golden Eggs” didn’t increase awareness of the issues, it only muddied them.

First, it’s important to recognize that, unlike workers in the private sector, the vast majority of Ohio public employees will never receive Social Security benefits. Private sector workers whose pensions are slashed can still count on monthly Social Security checks, but public employees lack even that safety net. The Dispatch treats this as a minor detail, but that distinction makes contrasting public and private sector pensions much the same as comparing apples to oranges.

Second, contrary to the Dispatch’s claims, eliminating “defined benefit” plans in favor of 401(k)-style “defined contribution” plans carries a far higher price tag than leaving the current benefits as they are. It’s not hard to understand why:  401(k)’s were always intended to supplement true pension plans; not replace them. In fact, the National Institute on Retirement Security found that relying on 401(k) style plans to pick up the slack for pension plan cuts has the effect of pushing more seniors on to public assistance programs to get the benefits they need. The cost to taxpayers? $7.3 billion.  That’s one reason why Time magazine recently described 401 (k)s as “a lousy idea, a financial flop, (and) a rotten repository for our financial reserves.”

Third, the basic premise of the Dispatch’s reporting, that maintaining the current pension system will require ruinous tax hikes simply doesn’t hold water. The reality is that government kicks in only twenty-five cents for every dollar paid in benefits to a retired Ohio public worker. The other seventy-five cents is funded by investment returns and by employees themselves. In fact, the contributions public employees make to pay for their pensions is roughly 40 percent more than what private sector workers now pay into Social Security. As a result, the people with the biggest stake in keeping pension costs down are public employees themselves.

Sadly, the Dispatch’s reporting isn’t only guilty of obfuscating the issues it tried to address, it managed to ignore some almost completely. Most important of these is the crucial role the pension systems play in Ohio’s economy.

Today, for every dollar in benefits paid, Ohio’s public pension system pumps $1.33 back into the state economy. Each year Ohio’s retired public employees spend $8.4 billion dollars in our state buying everything from groceries to newspapers to cars. At a time when Ohio desperately needs to protect jobs and create new ones, we can hardly afford to reduce one of our state’s few, steady sources of consumer spending.

Finally, no one needs to tell AFSCME members about the struggle facing blue collar, service, and other workers  whose pensions have been slashed. We see it every day. They’re our mothers, our fathers, our wives and our husbands. Taking a meat axe to public sector pensions won’t solve their crisis. Instead it will only compound it.

There’s no question Ohio’s public pension system needs to be reformed to become more efficient. And, in AFSCME, we are willing to do our part to make it happen. However, that can only begin when we recognize that a strong pension system providing decent benefits isn’t part of the problem; it’s part of the solution.

John A. Lyall
President, AFSCME Ohio Council 8, AFL-CIO