By Tom Loftus
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Louisville Metro Police spokesman Dwight Mitchell updates the media on the shooting at 3500 block of Kerry Drive in Bashford Manor on Monday, Sept. 18.Thomas Novelly/The Courier-Journal/USA TODAY Network
FRANKFORT, Ky. — Leaders of Kentucky’s teacher unions are not expecting the Bevin administration to embrace a consultant’s recommendation that retired teachers give up the part of their future pension benefits derived from cost-of-living increases granted between 1996 and 2012.
“While the administration has not developed a final plan, conceptually I don’t believe they intend to pursue that particular recommendation,” said Brent McKim, president of the Jefferson County Teachers Association.
Stephanie Winkler, president of the Kentucky Education Association, also said she does not expect the governor, or the General Assembly, will embrace the recommendation.
Winkler and McKim said they draw this conclusion based on meetings they have been part of within the past week with the governor and administration officials.
On Monday, the consultant, Philadelphia-based PFM Consulting Group, presented its final recommendations on ways Kentucky could get a handle on its massive public pension debt, which is officially estimated at about $40 billion.
The consultant’s 40-page slide presentation given to the Public Pension Oversight Board clearly displayed a recommendation to eliminate the portion of pension benefit payments resulting from cost-of-living adjustments granted between 1996 and 2012 to many state and local government retirees within the Kentucky Retirement Systems.
“While the administration has not developed a final plan, conceptually I don’t believe they intend to pursue that particular recommendation.”
-Brent McKim, JCTA president
But not as prominently displayed, and worded differently in the slide presentation, was a recommendation relating to eliminating cost-of-living adjustments over the same period for retired teachers.
Some stakeholders were initially uncertain how to interpret the recommendation as it relates to retired teachers.
But in interviews Wednesday, Winkler, McKim, Kentucky Retired Teachers Association Executive Director Bob Wagoner, and Teachers’ Retirement System General Counsel Beau Barnes all said they interpret the presentation to also recommend elimination of past adjustments from future payments for teachers just as it does for many state and local government retirees.
“It’s in there. And it’s a substantial clawback in benefits of retired teachers,” said Wagoner.
Bevin administration Budget Director John Chilton and PFM’s Michael Nadol did not return phone messages seeking comment.
McKim noted that there is a significant difference between the cost-of-living adjustments received by members of the Teachers’ Retirement System and those granted in past years to state and local government workers — a difference he said the Bevin administration recognizes.
Teachers, unlike most state and local government workers, do not get Social Security benefits when they retire. The teacher pension system is designed to account for that — teachers contribute more from their own paychecks, and their retirement plan is designed to be partly a replacement plan for Social Security.
The teachers’ retirement plan includes an annual 1.5 percent cost-of-living adjustment because most other Kentucky public employees get an annual adjustment in their Social Security benefits.
Adjustments for state and local government workers are different. They were started by the General Assembly in 1996, but never funded, and were discontinued in 2012 in an effort to control pension costs that year.
Both McKim and Winkler stressed that Bevin appears to have made no final decisions, and they do not know whether he will embrace PFM’s other recommendations — such as those affecting state government workers’ cost-of-living adjustments or suspending future adjustments for teachers’ benefits.
“Like I’ve said before, the PFM report has so many drastic recommendations,” Winkler said. “We feel like there are more palatable alternatives to pay down this debt.”
Reporter Tom Loftus can be reached at (502) 875-5136 or tloftus@courier-journal.com.