Head of Ky. Education Association says pension reform proposal may lead long-time teachers into earlier than expected retirements

10/28/2017 04:00 PM

FRANKFORT — After much debate about the details of a pension reform proposal laid out by Gov. Matt Bevin and legislative leaders last week, policymakers unveiled the plan in black and white on Friday.

The bill, meant to resolve Kentucky unfunded pension liabilities estimated at up to $64 billion, is 505 pages, and Kentucky Education Association President Stephanie Winkler hopes rank-and-file lawmakers have enough time to digest the legislation and how it will impact public employees and teachers in Kentucky.

“For legislators to not see a bill and potentially have to vote on it within a very short period of time, we would never ask one of our students to read a 600-page book and come back the next day and tell us what was in it,” Winkler said in an interview Friday before the bill’s release. “Reading comprehension is an important skill, and it’s not done at a quick pace.”

Teachers and other government workers have shown up en masse at various forums throughout the state, filling meeting spaces to hear from education leaders and lawmakers on the proposal.

Winkler says she’s concerned that the plan, which caps current defined-benefit pension participants at 27 years of service and transitions new and recently hired government workers and those who work beyond the 27-year threshold into defined-contribution accounts, may run afoul of the inviolable contract rights of public employees.

Bevin and top lawmakers have said they’re confident the pension reform plan will pass legal muster and that the 401(a) defined-contribution accounts outlined in the proposal will offer comparable retirement benefits for government employees. Without reform, they’ve said Kentucky’s pension systems will fail.

“The inviolable contract is one of the strongest pension contracts in the United States, and we feel like some of these proposals by the governor simply attack that inviolable contract and change things in the middle of the game for people who have used this to do long-range financial planning and have goals, things they want to accomplish, maybe even other careers they might want to venture into depending on their interests,” Winkler said.

“And now their entire future is in limbo. There’s so many unknowns. I’ve been criticized by the governor of ramping up the rhetoric when in fact my whole goal has been just the opposite. My goal has been to educate members about their pensions.”

Winkler says recent criticisms from Frankfort leaders that less than 10 percent of the $7.8 billion growth in unfunded liabilities in the Kentucky Teachers Retirement Systems from fiscal years 2008 through 2013 don’t tell the whole story and that chronic underfunding through the years has caused the pension system to miss out on $3.8 billion in investment opportunities.

“To say that it’s the system, which currently is 56 percent funded and would be on track to be fully funded had the legislature done their part and funded what was requested year after year after year, I just don’t understand that argument,” she said.

The head of KEA fears that once teachers reach the 27-year mark in their public service careers in Kentucky, they’ll likely retire and leave the classroom rather than move into defined-contribution accounts.

That’s based on talk she’s heard from teachers who have devoted years to Kentucky schoolchildren.

The pension reform proposal includes a three-year window for teachers who have 27 years in Kentucky classrooms to continue accruing benefits under the current system before moving them into 401(a) defined-contribution accounts.

“I would never give anyone retirement advice, but I have been told by many teachers that if their defined benefit is capped at 27 years that they will cease to teach, and that is a travesty,” she said. “Not only is it a travesty, it’s a matter of crisis for local school districts because they don’t have enough employees to fill open positions that we currently have right now in our state public education system.”

Whatever the General Assembly decides to do in a special session later this year, Winkler says teachers and other public workers will take notice.

Bevin has yet to set a date for the General Assembly’s return to Frankfort before next year’s budget-writing session.

“I will just say that all public employees are watching the legislature very carefully,” she said. “We are talking to everyone we can, and anyone that votes for this plan is not considering how devastating this plan could be to Kentucky communities, both financially and emotionally and for our kids.”


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