2 more things to check.
1. Make sure that the "JRE System Library" is setup as a library for your project.
Right click your project "Properties" > "Java build path", libraries lab. You should see "JRE System Library..." if you are setup correctly. If not click "Add library" and add "JRE System Library".
2. Make sure you haven't overridden your workspace complier settings at the project level.
Right click your project "Properties" > "Java Compiler", make sure that "Enable project specific settings" is NOT checked.
Good luck

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