Retired teachers jam capitol annex as pension bill fails to come up for a vote

02/28/2018 03:30 PM

FRANKFORTSenate Bill 1, the pension bill, had its first hearing today before the Senate Standing Committee on State and Local Government, but no vote was taken on the legislation until a committee sub is made available.

Hundreds of mostly retired teachers jammed the meeting room and three overflow rooms to take in the proceedings, jeering at several times throughout the proceedings.

Highlights of the bill and committee substitute include moving KERS and KTRS to a 30-year funding formula, placing all new non-hazardous employees, including teachers, into a hybrid cash balance plan with zero percent guaranteed interest. It would retain the 4 percent guaranteed investment growth for the Hazardous Duty Retirement hybrid cash balance plan.

All new non-hazardous employees in KERS and CERS would have the ability to choose to participate in a 401a defined contribution account.

It also allows current public employees and teachers to continue in their defined benefit plan and retire when they choose.

I also ends “supersizing” of legislative retirement, and reduces retirement benefits for legislators participating in the defined benefit retirement plan.

Specific to KTRS, it creates a hybrid cash balance for new teachers, maintains the KTRS social security exemption.

New teachers and teachers who have less than 5 years of service may choose to roll over their accumulated contributions into a hybrid cash balance plan.

In addition, school districts will contribute an additional 2 percent of pay for new members enrolled in the hybrid cash balance plan; investments will be managed by TRS within their defined benefit funds.

Teachers with 27 years or more of service can still retire after 27 years of service.

Teachers with 20 years or more of service in the classroom who choose to stay in the classroom longer than 27 years, will continue to receive a “high 3” enhancement at 27 years, and a 3 percent benefit factor for service beyond 27 years.

Teachers with fewer than 20 years of service, who choose to stay in the classroom longer than 27 years, will need 35 years of service and be, at least age 60 upon retirement to receive a high 3 and 3 percent benefit factor.

It also caps sick leave conversion benefits at the amount of sick leave accumulated by December 31, 2018.

Finally, a major change in the committee substitute establishes that cost of living adjustments (COLAs) for current and future retirees will be 1 percent a year until TRS is 90 percent funded.

Before presenting details of the bill, Bowen addressed the committee members and the teachers who were present about what went into crafting the legislation, which brought about some moans for the many teachers who were in the room.

Bowen emphasized that the bill in its current form is a result of compromise and discussions with stakeholders, including the KTRS having control of their investments.

“That was one of the very first concessions that we made, and we made changes from that point going forward,” Bowen said.

KEA President Stephanie Winkler feels that the bill, including the committee substitute, in in violation of the inviolable contract, and is hopeful that the teachers concerns will be listened to and addressed by lawmakers.

“We are hopeful that if it does pass out of the Senate, eventually the House will take into consideration our views and consider that this as unacceptable as we do,” Winkler said.

Attorney General Andy Beshear said on Wednesday that the bill does violate the inviolable contract — Something that Bowen took exception to.

“I think it’s unfortunate at this late date, that the Attorney General tries to weigh in on this,” Bowen said. “We’ve been working on this bill for months on end, we started engaging in this process last July, last August, and now, at the 11th hour, the Attorney General has decided to weigh in on this and I think that’s quite unfortunate.”

Stivers emphasized the portion of the bill which addresses legislative pensions, and eliminating current and future legislators abilities to “supersize their pensions.”

At first, the thought was to go after ones who have done that, but it was later decided to only address things moving forward.

“We think it was wrong, and we were going to initially try to claw back on those legislators who tried to supersize their pension,” Stivers said. “When you think about the legal aspects of it, we felt that we would lose in court, so we’re going to make it prospective instead retrospective.”

Bowen has promised that there will be ample time for legislators to study the committee sub before a vote on the legislation is taken but he did not give a specific date.

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