GOP pension plan will ‘devastate public education in Kentucky,’ teachers group says

'That takes a lot of money from us.' Teacher sounds off on GOP pension proposal at forum

At a forum with state legislators, a teacher in Madison County expresses her frustration with how the state has handled the state pension crisis.
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At a forum with state legislators, a teacher in Madison County expresses her frustration with how the state has handled the state pension crisis.

The GOP pension plan “will devastate public education in Kentucky,” Kentucky Education Association President Stephanie Winkler said Monday.

“The education workforce in the state of Kentucky, their years of experience are shaped like a barbell,” Winkler said on Monday. “We are heavy on people that are eligible to retire. And we are heavy on people that have five years or less of experience. If all those people retire and all those people leave the profession because they’ve had a promise broken to them, there will be nobody left to educate our children if this proposal comes to fruition as presented.”

The proposed long-term solution for Kentucky’s public pension crisis, announced by Gov. Matt Bevin and GOP legislative leaders last week, has spawned three KEA forums this week, where lawmakers will meet with educators. The first was in Madison County on Monday; next will be Northern Kentucky on Tuesday and Woodford County on Thursday, Winkler said.

At the Madison Central forum, the Madison County Education Association was selling red shirts declaring “a pension is a promise.” About 300 current and retired educators packed into the auditorium, armed with red and green papers ready to wave when they agreed or disagreed with the local lawmakers assembled in front of them.

But if they wanted to hear the two republican lawmakers, Rep. Donna Mayfield, R-Winchester, and Rep. Wesley Morgan, R-Richmond, defend the proposal, they didn’t hear it in their opening statements. Both Morgan and Mayfield pled ignorance, saying they hadn’t seen the bill yet and were not privy to its drafting process. Both pledged that they wouldn’t vote for anything that hurt teachers.

A bill has not yet been introduced for the 2018 General Assembly, but if a law with the elements of the proposal is passed, the proposed changes would not go into effect until July 1, 2018.

Fayette County Education Association President Jessica Hiler on Monday said members of the local group have similar concerns.

“Teachers in Fayette County remain frustrated because we have always met our obligation to the pension system, where the legislature has failed to meet theirs. Numerous experts have told legislators over many years that tax reform should come before pension reform,” Hiler told the Herald-Leader in a statement. “We should not even be talking about pensions until we address tax reform. The Governor should be focused on new revenue to fund the system, not distracting teachers from their priority of educating our children. Teachers are worried about how we will put a roof over our heads and food on the table just like everyone that works for a living. A pay cut for teachers and moving new hires into a 401K is not the answer.”

Educators and school superintendents from Paducah to Scott County are also expressing apprehensions about the proposal. The Paducah Sun reported that Paducah Public Schools Superintendent Donald Shively said, “I think we’ll see a mass exodus of veteran teachers and school and district leaders, which for us represents about 23 percent of certified district employees.”

Woody Maglinger, Bevin’s press secretary, said the governor “has personally met with KEA leaders, including Ms. Winkler, multiple times.

“The dialogue with KEA up to this point has always been civil and respectful,” he said. “The ‘Keeping the Promise’ plan even included several changes requested by KEA. ‘Keeping the Promise’ ensures current, future and retired teachers will have retirement security they can take to the bank.”

Rep. Wesley Morgan suggests using lottery money to help the pension system in Kentucky. Teachers didn't like his suggestion.

Republican House Education Chair John “Bam” Carney, a Taylor County Schools’ Central Office employee and former teacher, told the Herald-Leader Monday that “there’s a lot of good ideas in the proposal.”

He said there had been “good faith effort” to honor the educators’ contract. Carney, who is from Campbellsville, said he was “very concerned” about comments he’s heard by Winkler and superintendents. “The rhetoric, I think has done more damage to prospective educators than I think maybe what’s in the” proposal.

Carney said he’s not saying that the proposal can’t be improved, “but if we do not act on pension reform, when the budget process comes … it’s going to be more devastating.”

He said Kentucky should shift the focus to paying better teacher salaries. “We’re going to have to do all we can to improve salaries up front to bring people into our profession,” Carney said.

Among Winkler’s concerns, she told the Herald-Leader, was that “the promise is that everyone that is currently a public education employee had a set of expectations of what their benefits were when they were hired. This plan changes the financial futures in middle of the game which is unfair.

“It’s forcing people to retire early,”she said,

Winkler told the Herald-Leader that “anyone coming into the profession brand-new” after July 1, 2018 will no longer get a traditional pension. Instead, they would get defined-contribution plans, like a private sector 401(k) account, that they and their employers would contribute into.

Any current teacher or university employee who is part of the Kentucky Teachers Retirement System and has less than five years of service will have the option of taking the current value of their pension in a lump sum payment and rolling it over into a 401(K)-style plan.

Kentucky Gov. Matt Bevin said the 401(K) plan proposed for most future public workers will be very generous.

Under the proposal, teachers must contribute an additional 3 percent of their salaries for retiree health care benefits.

Current teachers are still eligible for their full pension after 27 years of service. However, once they have taught 27 years or reach the age of 60, they’ll be enrolled in a defined-contribution 401(K)-style plan. Any teacher who has reached 27 years of service by July 1, 2018 will have the option to continue getting benefits on their pension plan for three additional years.

Current retirees will keep their previously granted cost-of-living adjustments, although future cost-of-living adjustments will be suspended for the next five years. Adjustments for future retirees will begin after they’ve spent five years in retirement.

“We have an inviolable contract that says that we are guaranteed a defined benefit plan for our service,” Winkler said. “We expect our service to be however long we choose to stay in the profession, and Bevin’s plan basically assumes that he’s going to close that plan off to anybody if they choose to stay after 27 years.

“We’re trying to get people to stay and not retire and not make rash decisions because we just don’t know what the final bill will look like. Sometimes it’s hard to get people to understand why they should stay because they are very, very scared,” Winkler said.

Bevin, she said, “has created, single-handedly, a level of angst like I’ve never seen before and it’s detrimental to our students and to our communities.”

House Majority Leader Jonathan Shell, R-Lancaster, criticized the language Winkler used to describe the problems facing educators.

Shell said the conversation around pension reform is difficult, but that changes are needed to keep the pension system afloat.

“It’s different,” Shell said of the proposal. “It’s not going to be the same as what we had in the past. But I think using that kind of language isn’t doing the conversation we need to have as a state any justice.”

He said the suggested changes are modest compared to what had been recommended by an outside consultant hired by the legislature, and that the new proposal would keep most of the pension promise intact.

When asked whether the changes will save enough to directly address the unfunded liability, Shell said the changes will stop the problem from growing.

“If we don’t box this problem in,” Shell said, “We’ll never understand how big the problem is.”

He said once the legislature knows how big the pension hole is, they’ll be able to address tax reform in a way that still “incentives businesses” to come to Kentucky.

“Nobody in the legislature wants to do this,” Shell said. “It’s something we have to do.”

Valarie Honeycutt Spears: 859-231-3409, @vhspears

If you go

The first educator and lawmaker pension forum was held Monday at Madison Central High School in Richmond. The next two will be: 5 to 7 p.m. Tuesday at Dixie Heights High School in Fort Mitchell; and 5 to 7 p.m. Thursday at Woodford County High School in Versailles.

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