Education leaders unveil ‘Shared Responsibility Plan’
Education leaders from across Kentucky presented their “Shared Responsibility Plan” during a press conference in the library at Woodford County High School on Monday afternoon, Nov. 6.
The proposed pension plan was described as an alternative to an earlier one presented by Gov. Matt Bevin, which seeks to replace a defined benefit plan with a defined contribution (401(k)-type) plan for teachers.
While education leaders don’t support implementing a defined contribution plan or suspending cost of living adjustments for current retirees as proposed in Bevin’s pension plan, Woodford County schools Superintendent Scott Hawkins said, “We are willing to make sacrifices to contribute to the strengthening of the pension plan as long as these changes fall outside of the inviolable contract (no change to defined benefits) and do not negatively impact benefits already earned.”
“We understand that the status quo cannot be continued,” he acknowledged, “but the current bill – the governor’s proposal – contains several issues that are legally questionable… We cannot support breaking the law in order to achieve a reduction in the (state’s multi-billion dollar) pension liability.”
The proposed Shared Responsibility Plan includes a Rule of 85 (a combination of age and years of service) to determine when an employee becomes eligible for retirement benefits.
Now, Kentucky teachers can retire with benefits after 27 years of service, regardless of age.
“We are certainly willing and want to work with the General Assembly to support tax modernization and other means of funding to pay off (the state’s multi-billion dollar) unfunded liability,” said Boone County schools Superintendent Randy Poe.
The president-elect of the Kentucky Association of School Superintendents (KASS) executive committee said a defined benefit structure for employees “allows us to recruit and retain high-quality teachers and support staff…”
Mary Wilson, a fourth-grade teacher in Boone County, described the Shared Responsibility Plan as an avenue to begin working with state leaders “to come with a mutually agreeable solution to our pension crisis.” However, during a question-and-answer session at the close of Monday’s press conference, Tom Shelton, the executive director of KASS, said, “We attempted to present this plan five different times to … the governor’s staff. And when we mention the fact that it included defined benefits … it was explained to us that that was not acceptable. It had to be a defined contribution plan.”
Like the governor’s plan, the plan presented by education leaders on Monday does not address the existing unfunded liability, Shelton said. “The only real difference,” he added, “is they would be able to reduce some of the unfunded liability because they would force people out of the current (defined benefit) plan into the new (defined contribution) plan.”
Hawkins described the Shared Responsibility Plan as an example of what can happen when different education groups work together to solve a pressing problem. With eight pension systems for public employees in Kentucky, a variety of possible solutions must be considered, he said.
In response to a question, Shelton said he hoped the pension issue is addressed during the regular session of the General Assembly beginning in January 2018. That, he said, would allow teachers and education leaders to have adequate input as lawmakers consider possible changes to retirement plans.
“…Our stance on pension continues to be that we have a desperate funding problem in the commonwealth,” said Stephanie Winkler, president of the Kentucky Education Association. She said substantial and dedicated revenue streams are needed to pay for the state’s unfunded pension liabilities, public education and other essential government functions, which have not been addressed because of insufficient revenue.
“School districts across Kentucky have desperate needs to provide opportunities for students to learn and grow,” said Winkler. Without new revenue, she added, “We will continue to be forced to do more with less – as we’ve done for years.”
During an interview after Monday’s press conference, state
Rep. James Kay, a Versailles Democrat, said being in the minority party gives him no voice or seat at the table in terms of helping to develop a plan to address the unfunded liability pension issues facing Kentucky. However, he continues to support preserving a defined benefit structure for educators because “that’s the best way to recruit and retain the best teachers.”
“One of the tradeoffs for having great career educators,” he added, “is that we provide them with good benefits. And a defined benefit plan actually is cheaper in the long run – if you fund it.”