During a national crisis, when thousands of current and retired teachers are assisting their communities, the Kentucky Senate has passed a budget designed extort current and retired teachers by threatening to withhold $1.1 billion in actuarially required funding to the Teachers’ Retirement System (TRS) unless the General Assembly enacts pension reform by August 1, 2020.
This action is both morally wrong and a fiscal train wreck. As a result, Kentucky taxpayers and TRS beneficiaries could see another $1.1 billion in lost investment income over the next 10 years, repeating the same mistakes that got our pension system in trouble during the 2000s.
Senators are quick to tout that they are funding what is statutorily required to TRS. Yet the Senate seems to forget that years of underfunding has created a large unfunded liability that must be paid back. The Senate budget is essentially ignoring its actuarially required contribution to catch up the system, or in simpler terms, ignoring its full mortgage payment.
The KRTA stands ready to engage in meaningful pension-reform discussions and negotiations with our legislators; however, up to this point, all pension-related discussions have taken place behind closed doors with little to no input from KTRA or other retirement systems. Long-lasting, meaningful pension reform cannot take place unless this process is open and transparent and brings all affected stakeholders to the table.