By Kevin Wheatley
Click here to view the full article
Jump to Video InterviewAs top administration and legislative officials continue crafting their pension reform proposal behind closed doors, groups like the Kentucky Retired Teachers Association are left wondering how they’ll be affected.
Tim Abrams, the incoming executive director of the Kentucky Retired Teachers Association, says he appreciates House Speaker Jeff Hoover’s comment last week that the final proposal will be met with a “sigh of relief,” but members of his organization are still concerned with some ideas floated in the PFM Group audit released in August that could be included in a reform package.
Hoover and other legislative leaders have said they agreed to keep details of their closed-door talks private.
Abrams said that while his group has spoken with Gov. Matt Bevin, who has said he plans to call a special session on the subject later this year, about pension reform, KRTA has not been involved in any negotiations with top lawmakers and state officials.
“The only thing we have to go on at this time is the PFM report that was released Aug. 28, and in the last I would say month and a half or however long it’s been since that report came out, I’ve had the opportunity to be all over the state and speak with retired teachers,” he said in an interview Wednesday at the group’s Louisville headquarters.
“We have our fall workshops every year scheduled in September, so I’ve heard from a lot of retired teachers, and they’re very concerned.”
Abrams says while retired teachers are relieved that officials aren’t planning to rescind previously awarded cost-of-living adjustments, they’re worried that future COLAs may be linked to the Kentucky Teachers Retirement System achieving a 90 percent funding level and that health-care offerings for retirees may be altered.
Retired teachers are also worried that moving future teachers to defined-contribution plans and enrolling them in Social Security may hamper the state’s ability to attract quality candidates to the profession, Abrams said, also noting that he hadn’t heard much talk about raising retirement eligibility for teachers from 27 years of service to the age of 65.
With KTRS facing unfunded pension liabilities ranging from about $15 billion to $34 billion, Abrams says he hopes state leaders look at tax expenditures to come up with additional contributions. KTRS and the Kentucky Retirement Systems said last month that they would request some $5 billion in pension contributions, which is about a quarter of the state’s biennial budget.
“We definitely have a revenue problem in the state of Kentucky,” Abrams said. “We’ve talked about, we’ve got record new businesses coming to Kentucky yet we have a $200 million shortfall, and it’s confusing to us of why we’re talking about the pension problem when we really have a revenue problem. Our point is if we make the contributions to the system we have now, it’ll be fine.”
Abrams hasn’t formally polled members of his group on proposals like legalizing casino gaming and recreational marijuana that have been floated recently to alleviate Kentucky’s financial woes, but he says “those two things don’t have a great chance” based on comments from Bevin.