Pension crisis too critical to rush
Published 6:43 pm Thursday, November 30, 2017
As the state legislature and the governor continue to work to resolve the crisis concerning Kentucky’s pension system, it is more important than ever for Kentucky’s taxpayers and voters to remain vigilant.
It is both morally and ethically wrong to ask retired and active teachers to suffer because the state government refused to make its full required contributions to the Teachers Retirement System (TRS) for nine years. Public school teachers in Kentucky on average earn 60% less than workers in the private sector with similar educational backgrounds. Teachers cannot receive any Social Security benefits to supplement a 401(k) contribution plan like private sector workers can do. Establishing a 401(k) or 401(a) contribution plan will further destabilize the existing pension fund and will not curb the unfunded liabilities of TRS.
A recent analysis of the proposed pension system shows it will cost the state $4.4 billion more over twenty years in comparison to the current system.
As proposed in the current pension bill, freezing retired teachers Cost of Living Adjustment (COLA) for five years will cost a retired teacher over $70,000 over a twenty year period. COLAs for teachers have been at 1.5% annually since 1990 even though the rate of inflation has continued to rise. Teachers’ COLAs are pre-funded, meaning teachers contributed out of every paycheck to these COLAs. Teachers’ COLAs are protected by law (KRS161.620 & KRS161.714) so freezing COLAs is illegal.
Gov. Bevin still insists on calling a special session of the state legislature before January 1. That session will cost Kentucky’s taxpayers $365,000. No final pension reform bill is available to the public yet and the time frame to publish such a bill before a special session is extremely short. This will not allow the legislators and concerned parties enough time to thoroughly examine the final version of the bill and analyze the costs and effects of its plan.
This is too critical an issue to rush through without proper and thorough examination of ALL of the bill’s aspects.
Please continue to contact your legislators and urge them to protect all of Kentucky’s public employees including teachers. Call 1-800-372-7181or email by logging onto www.lrc.ky.gov. Thank you for your support.
Martha R. Francis
Lincoln County Retired Teachers Association