GLASGOW — About 250 teachers and retired teachers showed up at the Barren County High School auditorium Monday evening looking for answers about their retirement security.
They got a few — but not all they wanted from Rep. Steve Riley, R-Glasgow, a former teacher, coach and administrator at the school because Riley, like the teachers, is still waiting to see the plan.
“The governor’s office, the House and Senate leadership are all meeting trying to come up with a proposal,” Riley said. “Now, what that is, I don’t know yet.”
Riley was responding to concerns by teachers over recommendations by a consultant hired to review Kentucky’s badly underfunded public pension systems. Combined, the multiple systems face anywhere between $37 billion and $60 billion in unfunded liabilities.
The PFM Group called for significant changes to the retirement systems in Kentucky which are among the worst funded in the country, including a “claw back” of cost-of-living adjustments granted over the years and raising the retirement age to 65.
Those haven’t been well received by state employees and especially by teachers.
Gov. Matt Bevin has said he’ll call a special session this fall to enact changes. Originally, Bevin wanted lawmakers to also enact tax reform in the special session, but he’s backed off that, heeding lawmakers concerns that it’s asking too much to do both in one special session.
Bevin, however, has assured teachers and state employees that at least all of the recommendations from PFM aren’t likely to be incorporated into any final legislation.
Riley made that clear Monday night, saying he doesn’t believe the final legislation will resemble the PFM report, especially when it comes to clawing back cost-of-living adjustments.
“That’s not going to happen,” Riley said emphatically when asked about if by one teacher.
Nor does he think the final legislation will increase retirement ages for teachers — or for other employees like law enforcement officers.
“I feel with all certainty that we’re not going to add a 65-year age limit,” Riley said. “We’re probably not going to add any age limit.”
He told the group he understood “your angst” and said the issue is personal for him because of his own retirement and his 83-year-old father who lives on a teacher’s pension and several members of his family who are teachers.
Maybe it was because they know Riley or know he taught for 30 years and now draws his own teacher’s pension, but the questions weren’t adversarial.
Most questions focused on how the retirement system came to be poorly funded.
Beau Barnes, Deputy Executive Secretary and General Counsel for the Kentucky Teachers’ Retirement System, explained the teachers’ retirement system has performed well in recent years and reviewed the history and operations of the system.
Barnes said the fund has earned 15.37 percent this year and averaged 6.3 percent returns over the past 10 years. It pays out roughly $160 million in benefits each month to 50,000 retirees.
But it also has $14.5 billion in unfunded liabilities and that has lawmakers as well as teachers concerned about the future. That’s largely due to inadequate annual contributions by the legislature, sometimes based on unrealistic investment and payroll assumptions.
Barnes said the average retirement age for teachers is 59 with an average of 30 years on the job and the average retirement pay runs between $35,000 and $40,000 a year. That’s reasonable, Barnes said, because teachers aren’t eligible for Social Security.
One teacher asked Riley what impact on current retirees moving newly employed teachers into 401-K style, defined contribution plans might have and whether he would vote for such a change.
Riley said it is difficult for him to say how he might vote until he sees a final bill.
The same teacher criticized comments by Bevin about teachers “hoarding” sick days, prompting a sympathetic response from Riley.
Riley said he had a number of unused sick days when he retired because “I felt like I was supposed to be there for my students.” That brought an “Amen” from someone in the audience and a round of applause from the group.
Riley said he believes tax reform will eventually have to be considered and “everything has to be on the table.”
But mostly Riley told the teachers and retirees he’s waiting to see what Bevin and legislative leaders propose. Once he sees the proposal, Riley said, he hopes to share it with constituents and hear their concerns before deciding how to vote.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at email@example.com. Follow him on Twitter @cnhifrankfort.