Kentucky GOP trying again with teacher pension bill

Republicans in Kentucky are trying again with a bill that would make changes to the state's troubled public pension plan for teachers

FRANKFORT, Ky. -- Republicans in Kentucky are trying again to change the state's troubled public pension plan for teachers, tapping two public school employees to put forward a bill they hope will avoid a repeat of last year's massive protests that closed schools across the state.

The GOP-dominated state legislature passed a bill last year that would have put all new teacher hires into a hybrid pension plan that the state's largest teachers' association opposed. Thousands of teachers protested at the Capitol and the Kentucky Supreme Court struck that law down in December.

At least 40 educators ran for seats in the Kentucky legislature in November. On Wednesday, two of those that won filed the Republicans' second attempt at changing the pension system. And this time, it appears they have early support from the teachers' association.

"From all indications it looks much more promising than previous bills filed in the last two years," said Stefanie Winkler, president of the Kentucky Education Association. "This has been a much more open process."

House bill 504 was filed Wednesday by Republican Rep. Scott Lewis, the former Ohio County Schools Superintendent who still works for the school district and is a member of the Kentucky Teachers Retirement System. One of his co-sponsors is Republican Rep. Travis Brenda, a high school math teacher who defeated former House Majority Floor Leader Jonathan Shell in last year's GOP primary in part because of Shell's support for the first pension proposal.

The proposal would only impact teachers hired after Jan. 1, 2020. All of them would remain in a defined benefit pension plan, which was a priority for the Kentucky Education Association. But the bill would require that new teachers work until they are 55 with at least five years of service to be eligible for full retirement benefits. Right now, teachers can retire with full benefits after 27 years of service.

The bill also lessens the formula used to calculate retirement benefits, but that formula increases the longer people work past age 55, giving teachers an incentive to work longer.

"We had teachers retiring in their 40s, or whatever, and then drawing retirement for as many years as they were working," Lewis said. "(This bill) makes you work until you are 55, which is still a young age."

Lewis said early estimates show the bill would save the state $335 million over the next 20 years. But the changes would have little impact on the retirement system's unfunded liability. The Kentucky Teachers Retirement System is at least $14.3 billion short of the money it needs to pay retirement benefits over the next three decades.

All teachers hired after Jan. 1, 2020, would be classified differently than current teachers. If the funding level for those new teachers' benefits drops below 90 percent, the Kentucky Teachers Retirement System board of trustees could make benefit changes to save money, including raising the retirement age and lowering cost-of-living adjustments.

Lewis acknowledged the impact was small, but said it was "important for us not to do anything that added to the unfunded liability."

It's unclear how much support the bill has in the state legislature. Republican House Speaker David Osborne told reporters on Wednesday he has not seen the bill. He warned passing a pension bill would be difficult.

"To try to find something that we will find consensus, or at least close to consensus, within our caucus as well as something that the Senate would be supportive of is a very, very difficult process," Osborne said.