To the editor:
The argument Aaron Hilmer presented in the Aug. 25 Call against the pension plan for Missouri’s teachers cries for correction and clarification.
Let’s put aside the first half of his article, his criticism of a recently retired school superintendent and questioning whether that person deserves his pension. Instead, let’s accurately describe that pension program. Full disclosure: I am a public school retiree, a member of that program.
Public school teachers and professionals such as counselors and administrators are members of the Public School Retirement System, or PSRS. This is a state program created by the Legislature and governed by a board balanced between members either elected by system members or appointed by the governor. Contrary to Mr. Hilmer’s claim, no one is kept in the dark about PSRS. Anyone can visit
for complete information about the system, including summary and detailed financial annual reports.
Unlike Social Security which uses today’s employee and employer Federal Insurance Contribution Act, or FICA, contributions to pay today’s benefits, PSRS is an actuarial reserve. This means that a member’s benefits come from his or her individual contributions, matching contributions from their school district and the return on the investment of those contributions.
In short, contrary to Mr. Hilmer’s claim, PSRS is not a Ponzi scheme dependent on the contributions of new members to pay for existing retirees. The contributions of new members, currently set at 14.5 percent of their salary, fund their own accounts.
Retiree benefits are determined by a simple formula based upon years of service and the three highest consecutive annual salaries.
The average pension for members who retired in 2010 was just over $38,000. PSRS retirees do not receive normal Social Security benefits. If they do, those benefits are based only on income earned outside of teaching and professional roles. Moreover, those benefits are significantly reduced by Social Security because PSRS retirees also receive a public pension.
PSRS is nationally recognized for its management and investment strategies. It assures our educators a reasonable pension following decades of public service. It is not the flagrant giveaway Mr. Hilmer suggests and it provides a sounder use of member and public contributions than the 401(k)-type pensions he would impose on teachers.
Joseph F. Dunne