In 2025, KY General Assembly reneged on a deal made with teachers in 2010 | Opinion

Kentucky teachers took an undeserved financial hit from the Kentucky State Legislature during the 2025 session.

For background, the Shared Responsibility (HB 540) bill was passed in 2010. The Kentucky Teachers Retirement System Board and educational community members, including active and retired teachers, school board members, superintendents, and experts, collaborated to find a solution.

The bill established the TRS retiree health fund (Health Insurance Trust), which exists independently from the Kentucky Teachers’ Retirement Fund. At the time, although suggested and requested due to a history of underfunding by the state, the legislature refused to include increased matching contributions by the state into the Kentucky Teachers’ Retirement Fund to begin addressing its much-publicized unfunded liability.

The funding structure of HB 540 required active teachers to pay 3.75% of their salary, retired teachers under the age of 65 to pay the equivalent of the monthly cost of Medicare Part B, and school districts to contribute 3% of their gross payroll to the Medical Insurance Trust.

Notably, HB 540 included a provision stating that once the medical insurance fund achieved sufficient prefunding, as determined actuarially, the 3.75% contribution from active teachers shall be “decreased, suspended, or eliminated.” The same was true for the amount school systems paid in.

While receiving widespread praise for its collaborative development, the Shared Responsibility bill passed through the Kentucky House and Senate without any opposing votes. Governor Steve Beshear signed it into law on April 13, 2010.

Overall, the bill was a significant step towards securing financial support for retired teachers’ health care. It reflected a commitment to the educational community while relieving the Kentucky taxpayers of a $5 billion liability.

Sounds good? Right? Not so fast. The 2025 Kentucky State Legislature put the brakes on the “shall, in an actuarially accountable manner, be either decreased, suspended, or eliminated” part related to the active teacher and school system contributions to the Health Insurance Trust.

Now that the retiree Health Insurance Trust is nearly 100% funded, a reneged deal was voted into law with the passage of HB 694 (AN ACT relating to Teachers’ Retirement System benefit funding).

To paraphrase the new law, when the Teachers’ Retirement Fund, and the Health Insurance Trust are fully funded, the 3.75% presently going to the Health Insurance Trust may be decreased, suspended, or eliminated. In addition, the school funding for the retiree Health Insurance Trust will be diverted to the Teachers’ Retirement Fund.

According to the actuarial analysis of HB 694, the Teachers’ Retirement Fund will not be 100% funded until 2047. This means teachers will have to wait many more years than initially legislated to have a reduction in the 3.75% deducted from their paycheck—heavy sigh.

Governor Andy Beshear vetoed HB 694. In his veto message, he stated, “House Bill 694 breaks a promise made to teachers in 2010 and does so without even giving them an opportunity for input.” That’s right; the educational community was left out of the bill-making process this time around.

Beshear went on to mention that teachers would “need to pay much longer than the law calls for” and that “Breaking this promise is unfair to the teachers we rely on to guide our children and the future of the Commonwealth.”

Disappointingly, 67 members of the House and 29 members of the Senate voted to override Beshear’s veto, basically on partisan lines, with the overwhelming majority of the “yea” votes coming from Republicans. No doubt, this legislation takes money right out of the pockets of hard-working teachers.

Like many others across the Commonwealth, teachers have children to raise, student loan obligations to meet, car and mortgage payments to make, utility bills to pay, and groceries to buy, all on a limited budget. In addition, teachers purchase school supplies, necessities, and extras for their classrooms.

The 3.75% deducted from Kentucky teachers’ paychecks equals approximately $1,400 to $2,800 annually. This amount adds up over time while shortening teachers’ monthly budgets. This move does nothing to retain and hire Kentucky teachers at a time when teachers are becoming harder to find.

It is the job of those in power at the legislative level to fulfill their obligations to teachers. I encourage teachers, parents, and members of the general public to contact their legislators concerning the unfairness of HB 694.

Transparent and authentic commitments supporting teachers that ensure fair compensation and benefits are vital in creating sustainable educational environments. The Kentucky state legislature would be wise to keep in mind that our Kentucky public school teachers have the future of the Commonwealth in their classrooms when passing legislation that hurts the financial bottom line of educators.

Suzanne Barker Griffith is a retired Kentucky teacher, community advocate, and the Boyd County Justice of the Peace.