Let’s remember how we got into this pension mess in the first place.
Frankfort — not our current and retired teachers — failed to live up to its fiduciary responsibility to properly fund the Teachers’ Retirement System (TRS). Now, after nine years of insufficient funding and the loss of interest on those funds, Frankfort politicians want retired and current teachers, to bail them out of the debt they owe.
Our retired teachers are God-fearing, down-to-earth Kentuckians who dedicated their lives to educating our youth. They didn’t earn a big paycheck, and they certainly don’t have access to large amounts of money in retirement. They don’t have billionaires or outside groups forming “dark money” PACs to support pension reform. They don’t have influential lobbying firms in Frankfort trying to convince legislators to adopt a 401(k)-style retirement system that will benefit Wall Street
.
What teachers do have is years of service to our state and contributions from every paycheck into TRS with the expectation they will receive the retirement benefits they were promised.
Here is how the framework breaks the promise.
Kentucky’s 52,000 retired teachers — many of whom voted for the Gov. Matt Bevin because of his devotion to his fairness and faith — receive an average retirement benefit of $37,000 per year. This is only $11,000 higher than the poverty level for a four-member household established by the U.S. Census Bureau. Gov. Bevin’s proposal for a five-year freeze in cost-of-living adjustments (COLA) for all current and future teachers amounts to nearly a 7.5-percent reduction in these benefits. Under this proposed COLA freeze, a 60-year-old teacher making $3,000 a month would lose roughly $71,000 over his or her lifetime. Younger teachers would lose substantially more.
Given these modest retirement benefit levels, rising healthcare costs, this proposed framework would be financially devastating to retired teachers.
The Governor also has proposed that all new teachers must participate in a 401(k) defined-contribution plan rather than TRS, which is a defined-benefit plan. States that have implemented similar 401(k)-style plans, such as West Virginia, Michigan, and Alaska, all saw dramatic increases in their unfunded pension liabilities due to a lack of contributions to the old fund from new members. Case studies from across the United States show that switching to a defined-contribution plan does not solve the underfunded pension issue and will drive teachers to other states or out of the profession completely.
Frankfort is trying to mitigate this funding issue by promising state contributions going forward. Where have we heard this before? As retired teachers, we are skeptical of this promise — particularly after suffering through nine years of broken promises to properly fund TRS. For us, particularly our retired math teachers, this just doesn’t add up.
We appreciate Gov. Bevin’s and the legislature’s focus on this complex pension issue. But the framework proposed is the wrong solution. We implore him to look at the successes and failures of other states to come up with a solution that is fair to teachers and taxpayers. Crafting a solution behind closed doors and listening to the interests of big money outsiders won’t solve this problem. It only will break the promise to Kentucky’s retired teachers.
Tim Abrams is Executive Director of the Kentucky Retired Teachers Association.
Fund our pensions . Do not change them. A PENSION IS A PROMISE.
Tim,you hit the nail on the Head! This reminds me of our Wally Wilkerson days in Frankfort!!
Tim, thank you for stating the true factsI
Thank you for stating facts. I am so tired of fake news.
Thank you Tim for always standing for what is right
Thanks so very much for the facts behind the problem. The governor and the legislature should consider the ethical and moral obligations of their office. They usurped our funds in the TRS seemingly without thought of the repercussions. Now decisions must be made that will be very difficult because people in authority did wrong because they could. Do the right thing for the teaching profession which should be held in esteem by everyone in the great state of Kentucky. Again thank you Tim Abrams.
We thank you and want you to keep pushing these facts. At our local rally, it was appalling how little several of the legislators understood about teacher retirement issues. Inexcusable. They had time to prepare, at taxpayer expense, of course.
We must not we cannot allow this to happen. At 71 and with a bad knee I couldn’t be a Walmart greeter and shouldn’t have to be.I taught for 38 years for 24 of those years in addition to teaching completing my Masters and Rank I I moonlighted at the Local TV station as News Reporter, followed by a stint as Reporter for the local newspaper from 1980 through 1997 I also drove a school bus for 22 years. Gov. Bevin doesn’t have clue to what we teachers do and how little we make compare to other College Graduates.