Legislators should keep options open for better pension plan

Published 10:08 am Thursday, November 9, 2017

Dear Editor,

In the last few weeks members of the Lincoln County Retired Teachers Association have tried to explain some basic facts about the Teachers Retirement System. On Tuesday night, Oct. 31, there was a forum at Lincoln County High School with State Representative David Meade, State Senator Rick Girdler, KEA President Stephanie Winkler and “Bam” Carney, Education Chair. 

Winkler showed a copy of the 505 page Bill that was released last Friday for Pension Reform and had several notes to show questionable parts of the bill.

We appreciate the focus on these complex issues by Governor Bevin and the legislature. We do have a problem and it needs to be fixed with both changes and adequate funding. We do not need to make a quick decision to show that we are doing “something” to fix the problem. We need to do the “right” thing for all public servants covered under these pensions and that is fair to taxpayers.

For retired teachers the proposed COLA freeze of five years for a 60 year-old teacher making $3,000 a month would lose roughly $71,000 over his or her lifetime. It’s not just the five years that the freeze is taking away income but for the rest of their life.

The most devastating part for all new teachers would be mandatory participation in a 401(k) defined- contribution plan. As pointed out Tuesday night, a 401(k) is not meant to be a complete pension but rather a supplement to other retirement like Social Security. Unfortunately, because of a federal law Kentucky retirees are not a part of Social Security. When teachers under this system retire they have no security blanket of Social Security to fall back on if they run out of funds in their 401(k). They would then have to result to being on Welfare or depending on family to support them in old age. Our current pension plan that teachers were promised and that teachers contributed to while they were working covers a retiree until death. It also has disability, survivor, and life insurance provided for the retiree which a 401(k) or defined contribution does not have.

How horrible to treat public servants that have given their lives and careers as a mission to teach the future leaders of our country. Some people in the private sector think there is nothing wrong with this approach. 

However, teachers have sacrificed by taking lower salaries than they could have in the private sector with perhaps two college degrees to be able to do what they love to do with the promise that they would have a secure pension. 

Other states like West Virginia have tried the defined contribution (401 K) approach and have seen dramatic increases in their unfunded pension liabilities and have returned to defined benefits because economically it is a better management system. A defined contribution system does not solve the pension problem. 

Why does there have to be only one way – Governor Bevin’s plan? On a recent KET program Stephanie Winkler, KEA president, said that they had a plan in which teachers could still operate under a Defined Benefit plan but the governor would not look at this plan. William Smith from Bluegrass Institute on Pension Reform said they too had a hybrid Defined Benefit Plan, but the leadership would not listen to that plan. 

I would say to legislators that they should keep the options open for a better plan than the one that is currently in the bill, as well as considering the outcome of reduced numbers going into the teaching profession as a result of the bill becoming law.

We know the legislators have a dauntless task with several complicated situations to be addressed with budgeting and tax reform. We, past, current, and future teachers are praying for you to look at our piece to the puzzle with a solution to this issue that treats everyone fairly and does not throw out what works just so that it can be said that “something” has been done.

Thelma Blair

Lincoln County Retired Teachers Association 

Former Central Kentucky East Retired

Teacher Association President