Difficult decisions ahead regarding state retirement systems

Published 9:43 pm Tuesday, September 5, 2017

By Michael Rowe

Lincoln County Superintendent

Difficult decisions lie ahead regarding our state retirement systems.

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The more than 325 certified employees and the more than 345 classified employees who are employed by the Lincoln County School District have an opportunity – right now, today – to make a difference in Kentucky’s most pressing budgetary and policy issue: public pension reform. Your actions on this issue will not only affect you, but also hundreds of thousands of former, current, and future school district and public employees. We cannot afford to squander this opportunity.

On Monday, Aug. 28, the Public Pension Oversight Board (PPOB) will convene in Frankfort to hear the final report and recommendations of the PFM Group, the company hired to do an in-depth analysis of Kentucky’s underfunded public pension systems. The recommendations revealed on Monday will form the basis for potential action on pension system changes, expected to take place during a special legislative session, likely to occur in October. Legislators will meet in multiple groups next week after Monday’s report, to discuss development of a legislative plan to address the recommendations.

The need for employees to contact legislators has never been more timely or critical. The decisions made in the next few weeks will literally have life-changing consequences for current and future teachers and administrators, classified school district employees, and employees of state and local government. Legislators must hear from you!

Phone numbers and emails for legislators are easily accessible at www.lrc.ky.gov. In addition, there is a toll-free number available to leave a message for any legislator, by calling 800-372-7181. And it is likely that legislators will be out and about at community events like football games, soccer games, volleyball games, festivals, etc.

Call, write, or have a conversation with Senators and House Representatives in the next few days. Share any or all of the following messages, and ask for a commitment to preserve the retirement benefits that have been promised to public employees for decades, by the General Assembly.

Points to make:

• Funding for public education – including funding for pensions – is an investment, not a cost. Economic development of our state and our communities is dependent upon a high-quality workforce, which can only come from high-quality schools. Sound pension systems and competitive pension benefits help assure that Kentucky will continue to attract and retain excellent educators and school employees.

• Pension benefits for current school district employees represent promises made the General Assembly to those employees, and they have already earned those benefits. Like any employer-employee relationship, teachers and school administrators accepted their employment in schools based on assurances that they would receive certain levels of salary and benefits. More importantly, these assurances are in law. Each year that they have already worked represents a year in which they performed their obligations under that contract. The legislature must live up to its obligations as well, and continue to provide the benefits it has committed to provide for each of the years that the employee has already worked. Any retroactive reduction of benefits, including sick leave accumulation, would represent a breach of contractual agreements.

• Drastic reductions in future retirement benefits would irreparably damage the ability to retain and recruit a quality education workforce. Right now, more than 20% of Kentucky’s teachers and administrators are eligible to retire. Many are already doing so, based simply on fear of the unknown as it relates to future pension changes. Any change to pensions that is perceived as drastic or punitive will drive away thousands of talented school employees, and it will be impossible to replace them all. The impact on students, and on Kentucky’s future, would be devastating.

• Pension system members must be part of the solution. The members of all the public pension systems, through their representative groups, must be included in the development of solutions to the pension crisis. Excluding those most directly affected by the changes will only alienate them and result in a lack of buy-in. Many groups have well-developed ideas for addressing pension reform, and can be an asset to crafting and supporting thoughtful, measured remedies to our current pension woes.

• There are many rumors and much fear in the air about the pension problems we face, and about the potential for poorly designed, harmful responses by policymakers. If Lincoln County School District Employees and their colleagues get their message out quickly and effectively to legislators, the likelihood for the adoption of sensible solutions grows dramatically.

Thank you for what you do for the students of Lincoln County.