After years of protests, KY legislators prepare for another run at teacher pensions
Despite large protests at the state Capitol in recent years, Republican lawmakers are making another attempt at changing retirement benefits for Kentucky teachers — but only for new hires, starting in January 2022, according to the sponsor of one measure.
State Rep. C. Ed Massey, R-Florence, said he is preparing to pre-file a bill for the 2021 legislative session that would shift more responsibility for retirement benefits from the state of Kentucky to educators.
Massey spoke about his proposal on Monday to the Public Pension Oversight Board in Frankfort. The Kentucky Education Association did not testify at the hearing and did not immediately respond to a request for comment afterward.
For members of the Teachers’ Retirement System of Kentucky hired after Jan. 1, 2022, the current defined benefit pension plan would be replaced with a “hybrid plan” that offered both a guaranteed “foundational benefit” and a defined contribution “supplemental benefit,” Massey said.
For the foundational benefit, employees would contribute 9 percent of their pay and employers would contribute 8 percent. The employees’ contributions and accrued interest would vest immediately and be portable if teachers left their jobs.
For the supplemental benefit, employee and state contributions would be two percent each, subject to “risk control provisions” to be included in the bill.
The state would create a “stabilization reserve account” that would be tapped if the new plan fell below a 90 percent funding level. If the funding level fell below 90 percent, certain risk controls would be triggered. Among them, the TRS Board of Trustees would make “utilization adjustments” as needed to boost the funding level.
Kentucky teachers have been sensitive about proposed reductions to their pensions, in part because the pensions are all that sustains them in retirement. They do not collect Social Security retirement benefits.
As of June 30, the $20.8 billion TRS had 58.4 percent of the assets it’s expected to need to cover future liabilities.
Massey said he’s spent the last six months meeting with different constituencies, including education groups, to hear their concerns and collect their ideas for his proposal. The lawmaker said he might have a written bill ready to be shared with the public by Wednesday’s meeting of the Interim Joint Committee on State Government.
Rep. Jim DuPlessis, R-Elizabethtown, praised Massey for coming forward with his plan. DePlessis is co-chairman of the Public Pension Oversight Board.
However, Democrats on the board said they are concerned about how well Massey has addressed issues raised by teachers protesting past legislative efforts to make their pensions less generous. One of the greatest barriers to teacher recruitment in Kentucky is unattractive wages and benefits compared to other jobs requiring a college degree, said state Rep. Joe Graviss, D-Versailles.
This story was originally published December 14, 2020 at 5:02 PM with the headline "After years of protests, KY legislators prepare for another run at teacher pensions."
