By Michon Lindstrom
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FRANKFORT- It was the educators turn to testify in front of the Public Pension Working Group.
The five organizations had a chance to give their recommendations on how to help fix Kentucky’s troubled pension systems.
Kentucky Education Association, Kentucky Retired Teacher Association, Kentucky School Boards Association, Kentucky Association of School Superintendents, Kentucky Association of School Administrators testified in the fourth meeting.
The group said they all agreed on several issues, including one they wouldn’t budge on.
“Defined benefit pensions are something we are not willing to make a deal on,” said Stephanie Winkler, President of the Kentucky Education Association. “Defined benefit pensions are Social Security replacements. Teachers in Kentucky do not receive Social Security.”
Winkler went on to explain the turmoil teachers have experienced while pensions have been debated.
“Frankly, the anxiety, the turmoil, the fear that has been put into my colleagues, myself, and all of us over the four years of what our future holds,” she said. “we feel has been unjust, unnecessary, and could have been avoided.”
Co-chair of the working group, Sen. Wil Schroder, R-Wilder, took issue with the groups stance on defined benefit plans.
“It’s a little frustrating when really the first thing we heard from you all today is that there is a line in the sand,” he said. “That there’s no conversation around it. That it’s defined benefits or bust.”
Lawmakers asked if making changes to allow teachers to receive Social Security is something teachers would be open to. Winkler says that wouldn’t save the state any money.
“Social Security is not the answer. The answer is for us to worry about how we can improve our systems to help recruit and retain the best educators,” she said. “Our state constitution dictates the legislature fully funds and have a system of common schools. That means we should be investing everything in our state coffers to provide for our public schools.”
Another the group of educators was supportive of was separating the County Employment Retirement System from the rest of the Kentucky Retirement Systems. This is something that has been coming up frequently in talks about the pension system.
Currently, CERS is funded at 54 percent but Sen. Damon Thayer, R-Georgetown, warns the funding level in the system isn’t going to remain there.
“That’s going to go down because there are now more realistic actuarial assumptions. In order to meet those numbers which would have spiked if we would have not passed the phase-in,” Thayer said. “With the phase-in going into effect, that 54 percent unfunded liability in CERS is going to go down.”
Senate President Robert Stivers, R-Manchester, also warned the group it’s not that simple to just remove a single retirement system.
“When you start talking about outside litigation and what happens,” Stivers said. “Because when the CERS goes that’s going to affect every school board. That’s going to affect their ability to do one time payouts at the end of the system. That’s going to affect tax rates at the local levels. It all impacts each other and you can’t unwind the system and make a singular decision.”
Stephanie Winkler said this is something is aware of–but said the state is spending money in other areas that is unnecessary.
“I appreciate the complexity of the issues, but I would be remiss if I did not point out that our state continues to give out billions and billions of dollars in tax breaks and tax credits that well supersede the revenue we bring in in the state,” she said. “I think it’s a matter of priorities. What I’ve been told from my retirement system is that structural changes aren’t necessary to maintain the system. That is just needs that look back funding.”
The next meeting is Tuesday.