Renewed Debate about Teacher Pensions in 2021 General Assembly

As we look ahead to the upcoming session of the Kentucky General Assembly, the issue of teacher pensions has started to make news again.  The headlines alone have caused many educators to nervously contemplate how they will get through another pension struggle on top of the stresses of COVID, the challenges of virtual learning and the threat of potential student learning loss.  

The debate over teacher pensions in 2018 led to widespread protests, teacher walkouts and a significant political pushback that led to the election of Democratic Governor Andy Beshear in red-Kentucky the
following year.  

The question is whether the GOP, with a comfortable veto-proof majority in the legislature, will approach the topic any differently given the lessons of 2018-2019.   

We got a glimpse of that this past week.  Rep. Ed Massey (R) from Boone County has emerged as a voice of reason for Republicans on this issue.  Massey has been working on a bill that will likely be pre-filed ahead of the session.  Massey's rhetoric on this issue comes through his experience as a former school board member in a family with ties to public education.   He has done a good job of brokering broad involvement of the stakeholders from the school board association, administrators, superintendents, KDE, KEA and the Jefferson County Teachers Association.  His coalition in the legislature is more broad and bi-partisan than the previous proposals. He affirms the importance of having a competitive pension program because "high quality teachers in the classroom must be our top goal."  His open and honest process is refreshing. 

Early versions of the bill avoid most of the concerns that were so contentious with educators a few years ago. First and foremost, it does not impact anyone in the system either active or retired.  It applies only to future hires in the system going forward.   The proposal includes a hybrid plan that keeps a defined benefit rather than the 401(k)-only plan proposed two years ago.  This is critical since teachers are not eligible for the defined benefit most Americans receive--social security.   The new plan is also portable, which has an appeal to the younger generation of teachers that are far less likely to work in the same job or even career for 30 years.  The bill also includes several risk control provisions such as a "stabilization reserve account" to be accessed in the event that the new plan falls the 90 percent funding level.  The risk provisions also call for the TRS Board to make utilization adjustments as needed to increasing funding levels.

The new plan is not without controversy.  There are still some disagreements about keeping the Teacher Retirement System (TRS) Board as it is constituted as well as the expressed goal of fully funding the ARC. While Massey has demonstrated an openness to address both issues, it remains to be seen if his fellow Republicans will agree. Several Republicans will point out that it does not address many of the cost factors that exist in the present system, it does, however, offer a fresh start for the future.

There is a lot of work to do, but Massey has certainly changed the tone from the acerbic approach of the Matt Bevin-era proposals.  It is imperative that the Commonwealth have a competitive plan for teacher pensions.  Kentucky ranks among the lowest states in the country for teacher compensation.  One of the bright spots has been a generous retirement benefit.  The timing may be right to change the pension system for new hires to create more sustainable model for the future.  Remaining competitive in attracting and retaining high quality teachers should be a primary objective for the future of the Commonwealth.  Such a task will require a sustained and bold commitment to public education funding and teacher compensation.