Teachers rally outside Kentucky capitol protesting 'abhorrent' pension plan

FRANKFORT, Ky. (WDRB) – A sponsor of a pension bill that would alter benefits for future teachers while keeping them in a defined-benefit retirement plan said Thursday that he believes support from educators will be pivotal for the measure.

House Bill 504, filed Wednesday by GOP Reps. Scott Lewis and R. Travis Brenda, would offer teachers hired after Jan. 1, 2020, defined-benefit pensions and newly created supplemental accounts.

Lewis, a Hartford Republican and former superintendent of Ohio County Schools, said preliminary estimates show HB 504 would save the state $335 million over a 20-year period if passed into law. The bill is currently being scored, he said.

To achieve those savings, Lewis said new teachers would be required to work until they are 55 before they reach retirement eligibility and their retirement factors – percentages used in calculated retiree benefits – would be lowered.

The legislation would also lower total employer contributions from 13.1 percent for those already in the Kentucky Teachers Retirement System to 10.75 percent for new hires, according to the bill. New teachers would be asked to chip in more, with HB 504 calling for employee contributions of 13.75 percent of pay instead of 12.86 percent currently.

HB 504 also directs any sick leave balances to teachers’ supplemental accounts instead of counting those amounts toward their last year of pay, which affects benefit calculations. Those supplemental accounts, which would also receive mandatory contributions from teachers and employers worth 2 percent of pay plus any voluntary contributions, could be paid in lump sums, installments and annuitized as a lifetime benefit, according to the bill.

While lawmakers couldn’t amend benefits for teachers hired after Jan. 1, 2020, the KTRS board would have some leeway in changing things like the mandatory retirement age and benefit factors if funding for new teacher benefits dips below 90 percent. Other options to shore up funding include using mandatory contributions to supplemental accounts and dipping into a newly created stabilization account, according to HB 504.

Lewis told reporters that he had met with several teachers who are receptive to the bill, and he hopes their support leads to bipartisan backing for HB 504. Keeping a defined-benefit pension “is very important to attract new hires,” he said.

“A lot of people are just now looking through it,” Lewis said. “… If it’s something that teachers can support, I think it would have a better chance of passing.”

Since HB 504 was filed late Wednesday, Lewis said he didn’t know how much support the legislation had in the House Republican caucus.

Pension reform has been a turbulent subject for Kentucky’s General Assembly, particularly in the last year.

Lawmakers passed a pension reform bill during last year’s session, prompting thousands of red-clad teachers to protest on the steps of the Capitol. The Kentucky Supreme Court overturned that bill, which would have moved new teachers into hybrid cash-balance pension plans, on procedural grounds in December, and when Gov. Matt Bevin called legislators back to Frankfort in a special session days later to reconsider pension reform, they gaveled out two days later because they could not agree on a path forward.

Rep. Jerry Miller, a Louisville Republican who chairs the House State Government Committee, is among lawmakers in the lower chamber still reviewing HB 504. Miller told WDRB News that he had not read details of the bill and would likely call a special committee meeting in the coming days to discuss the measure.

But Miller isn’t sure whether any bill changing retirement benefits for public workers will pass during this year’s legislative session.

“Given the history of the subject, I would be foolhardy to make a prediction,” he said.

The bill has garnered some early support among educators, who were among the most vocal critics of last year’s pension reform effort.

Claire Batt, a retired teacher from Lexington who now advocates for education issues in Frankfort, called HB 504 “a positive step.”

“I think this bill has the potential to make people feel confident that there will be benefits there for their future and keep attracting people to the profession,” she said.

The Kentucky Education Association’s board has not taken a formal position on HB 504, but KEA President Stephanie Winkler credited Lewis for engaging stakeholders as he began drafting the bill. Lewis told reporters he has been working on the legislation for about a month.

“On first blush it looks very promising, but of course it will be up to my board to take an official position, and we plan to get into that next week,” Winkler said.

For Jefferson County Teachers Association President Brent McKim, HB 504 “looks like a better direction” than last year’s pension reform bill.

“It provides a defined-benefit retirement so teachers know that they will have at least some level of retirement that doesn’t depend on the stock market, which is critical when they don’t have Social Security,” McKim said.

Still, McKim was unsure how the bill would fare more than halfway through this year’s session.

“I think it’s always tough to pass any bill, but I think this is one that marks a positive step in the conversation about the future of the teacher’s retirement system,” he said.

Reach reporter Kevin Wheatley at 502-585-0838 and kwheatley@wdrb.com. Follow him on Twitter @KevinWheatleyKY.

Copyright 2019 WDRB Media. All Rights Reserved.