Skip to Main Content

Proposed Legislation to Modify Kentucky Teachers' Pensions

Proposed Legislation to Modify Kentucky Teachers' Pensions

Renee Shaw talks with guests about the Kentucky teachers' pension plan. Guests: State Rep. Patti Minter (D-Bowling Green); State Rep. C. Ed Massey (R-Hebron); State Rep. James Tipton (R-Taylorsville); State Rep. Buddy Wheatley (D-Covington); Eddie Campbell, president of the Kentucky Education Association; and Brent McKim, president of the Jefferson County Teachers Association.
S28 E6 Length 56:34 Premiere: 2.22.21

Legislators and Education Officials Discuss a New Retirement Plan for New Teachers

During the 2018 General Assembly session, teachers from around the state swamped the capitol to protest a pension reform measure that Republican legislative leaders slipped into a wastewater bill and rushed to final passage.

The Kentucky Supreme Court eventually overturned the bill that changed pension benefits for current and future teachers, saying lawmakers and the public weren’t given the proper time to consider the legislation.

Three years later, a new teacher reform proposal is before the General Assembly. State. Rep. C. Ed Massey (R-Hebron), the architect of the new measure, says hopes to avert many of the hard feelings that accompanied the so-called “sewer bill.” He spent more than a year working with education stakeholders to craft House Bill 258.

“There had to be some trust rebuilt after 2018 and all the problems that were associated with that,” says Massey. “I didn’t want anything to be forced upon anyone, so that’s why we brought these groups to the table to build that collaboration.”

HB 258 focuses solely on new educators hired after Jan. 1, 2022. They would be placed into a new retirement tier that blends a defined-contribution or 401(k)-type plan with a traditional defined-benefit pension.

“This is a true hybrid plan, and it was built on a consensus of all the groups,” says Massey. “There was no appetite to discuss something that would affect current teachers or retired teachers. This is what we could agree on.”

Rep. James Tipton (R-Taylorsville), a cosponsor of the bill, says public school teachers enrolled in the new tier would pay slightly less into the foundational part of the plan (the defined-benefit portion): 9% for future hires versus 9.105 percent for current employees. But now they would also contribute 2 percent of their pay to a supplemental account (the 401(k)-type portion), which will be matched by state. The health insurance contribution remains the same at 3.75 percent, says Tipton.

If a teacher leaves his or her job in the first five years, they can take their portion of the supplemental savings with them. If they leave after five years, they can take their portion and the state’s contribution plus any interest earned on that account.

Tipton says while current teachers contribute 12.855 percent to their defined-benefit pensions, new hires would contribute 14.75 percent to their hybrid retirement plans.

(New university teachers enrolled in this tier would pay slightly different amounts for their retirement package.)

Retirement benefits for new teachers would be based on the highest five years of salary, instead of the current three years. The earliest a new teacher could receive full retirement is at age 55 with 30 years of service. Current teachers receive full benefits after 27 years of service and no set age threshold.

“We want a fair compensation package to our teachers that will attract them to the industry, says Tipton. “But we also have to have a system that is fair to the citizens and taxpayers of the commonwealth.”

The House approved HB 258 on a 68-28 vote in early February. It now awaits action by Senate.

Reaction to the Proposed Plan

So far the Kentucky Education Association has not taken a position of the legislation. But KEA President Eddie Campbell does say the group would prefer that no changes be made to the teacher pension plan.

“KEA has a long standing position that the existing defined-benefit system works, and will continue to work well into future – as long as it is properly funded,” says Campbell.

Campbell says the proposal will make it more difficult to recruit new people into the teaching profession. Instead of adding a fourth tier to the teacher retirement system, he says lawmakers should focus on providing more support to new educators, including paid professional development, mentorships, and funding needed classroom resources.

Unlike the KEA, the board of the Jefferson County Teachers Association has endorsed the plan. JCTA President Brent McKim says since lawmakers were determined to create a new tier for newly hired teachers, he wanted educators to be part of those discussions. He says it was critical that any plan maintain existing benefits for current teachers and retirees and also provide new hires similar retirement benefits.

“When you look at the total benefit package for the current tier and the proposed new tier, they are roughly equivalent, depending on what age you start working and what age you retire,” says McKim.

In addition to JCTA, the Kentucky Association of School Administrators, the Kentucky Association of School Superintendents, and the Kentucky Chamber of Commerce have endorsed HB 258, according to Massey. But Frankfort Democrats remain skeptical of the proposal, which Republican leaders moved through committee and to a full House vote on the same day.

Rep. Patti Minter (D-Bowling Green), who is a history professor at Western Kentucky University, says teachers deserve better than to have another pension plan rushed through the legislature. She contends the move from a straight defined-benefit plan to a hybrid plan for new hires will result in a 10 percent cut in benefits over the course of a teacher’s retirement.

“Why did we vote for a plan that pulls the rug out from under our next generation of teachers at a time that our working teachers are having the most difficult academic year of their lives as they teach our children in this COVID environment?” says Minter.

Minter and fellow Democrat, Rep. Buddy Wheatley of Covington, say the plan will either cause aspiring teachers to move to neighboring states that offer better pay and pension packages, or simply choose another profession.

“The risk is being shifted from the state to our new teachers. That concerns me,” says Wheatley. “I think they deserve a secure retirement, and a fully funded... defined-benefit pension system is the best way to do that.”

Halting Growth in Existing Unfunded Liabilities

Critics of HB 258 also say the plan does nothing to address the estimated $15 billion in unfunded liabilities currently facing the Kentucky Teachers’ Retirement System. Democrats contend that launching a fourth tier of teacher pensions will only further weaken that plan.

“When you create a new system that’s going to reduce the number of people in the defined-benefit plan, obviously you do, over time, put benefits for people who are currently in the system or retired in jeopardy,” says Minter. “The system works by bringing people in constantly. You fund it by having new people.”

Tipton says HB 258 was never meant to reduce the existing unfunded liability, but he contends it will stop that obligation from getting larger.

Massey says an actuarial analysis of his bill indicates it could save the state as much as $3.57 billion over the next 30 years – money that could be put towards the current unfunded liability. Without stopping the bleeding in the current pension deficit, Massey and Tipton say the state will face an even greater funding crisis in the future as ever more General Fund dollars get allocated to pension liabilities.

“We would all like to see more money go in to teacher salary, to programs to support teachers,” says Tipton. “However, all the growth over the last few years that we’ve had in our General Fund budget has gone to the increased costs of the teacher pension system and also our Kentucky Retirement System.”

Another benefit of HB 258, according to Massey, is that it includes a provision to prevent the new hybrid plan from adding to the overall pension deficit already facing the state. If the defined-benefit portion of the new plan falls below 90 percent funding, the legislation requires the teachers’ retirement board to take corrective action.

For example, the board could move money from the supplemental fund into the foundational plan to ensure it remains funded at proper levels, says Tipton. Massey adds that only the KTRS board can make that decision. He says lawmakers would not be allowed to raid the supplemental account for money to fund other state needs.

Wheatley and Minter say they appreciate the work Massey has done to craft the legislation with stakeholder input, but if HB 258 continues to move forward, they want teachers to have the flexibility to choose between the existing retirement plan and the new tier.

“I hope there’s some consideration about making this an option as opposed to a mandate to go to a new whole system,” says Wheatley.

The bill is now before Senate State and Local Government Committee, and Massey says he expects the panel will take it up in the next two weeks.

Program Details

Kentucky Tonight

About Kentucky Tonight

Kentucky Tonight, hosted by Renee Shaw, is an hour-long, weekly public affairs discussion program broadcasted live on Monday evenings. Discussions focus on issues confronting Kentuckians.

TV Schedules

Jump to Recent Airdates

Upcoming

Kentucky Tonight

  • Monday April 26, 2021 8:00 pm ET on KET
  • Monday April 26, 2021 7:00 pm CT on KET
  • Tuesday April 27, 2021 6:00 am ET on KETKY
  • Tuesday April 27, 2021 5:00 am CT on KETKY
  • Tuesday April 27, 2021 2:30 pm ET on KETKY
  • Tuesday April 27, 2021 1:30 pm CT on KETKY
  • Tuesday April 27, 2021 11:00 pm ET on KETKY
  • Tuesday April 27, 2021 10:00 pm CT on KETKY
  • Wednesday April 28, 2021 1:00 am ET on KETKY
  • Wednesday April 28, 2021 12:00 am CT on KETKY
  • Wednesday April 28, 2021 9:30 am ET on KETKY
  • Wednesday April 28, 2021 8:30 am CT on KETKY
  • Wednesday April 28, 2021 6:00 pm ET on KETKY
  • Wednesday April 28, 2021 5:00 pm CT on KETKY

Kentucky Tonight

  • Monday May 3, 2021 8:00 pm ET on KET
  • Monday May 3, 2021 7:00 pm CT on KET
  • Tuesday May 4, 2021 6:00 am ET on KETKY
  • Tuesday May 4, 2021 5:00 am CT on KETKY
  • Tuesday May 4, 2021 2:30 pm ET on KETKY
  • Tuesday May 4, 2021 1:30 pm CT on KETKY
  • Tuesday May 4, 2021 11:00 pm ET on KETKY
  • Tuesday May 4, 2021 10:00 pm CT on KETKY
  • Wednesday May 5, 2021 1:00 am ET on KETKY
  • Wednesday May 5, 2021 12:00 am CT on KETKY
  • Wednesday May 5, 2021 9:30 am ET on KETKY
  • Wednesday May 5, 2021 8:30 am CT on KETKY
  • Wednesday May 5, 2021 6:00 pm ET on KETKY
  • Wednesday May 5, 2021 5:00 pm CT on KETKY

Kentucky Tonight

  • Monday May 10, 2021 8:00 pm ET on KET
  • Monday May 10, 2021 7:00 pm CT on KET
  • Tuesday May 11, 2021 6:00 am ET on KETKY
  • Tuesday May 11, 2021 5:00 am CT on KETKY
  • Tuesday May 11, 2021 2:30 pm ET on KETKY
  • Tuesday May 11, 2021 1:30 pm CT on KETKY
  • Tuesday May 11, 2021 11:00 pm ET on KETKY
  • Tuesday May 11, 2021 10:00 pm CT on KETKY
  • Wednesday May 12, 2021 1:00 am ET on KETKY
  • Wednesday May 12, 2021 12:00 am CT on KETKY
  • Wednesday May 12, 2021 9:30 am ET on KETKY
  • Wednesday May 12, 2021 8:30 am CT on KETKY
  • Wednesday May 12, 2021 6:00 pm ET on KETKY
  • Wednesday May 12, 2021 5:00 pm CT on KETKY

Kentucky Tonight

  • Monday May 17, 2021 8:00 pm ET on KET
  • Monday May 17, 2021 7:00 pm CT on KET
  • Tuesday May 18, 2021 6:00 am ET on KETKY
  • Tuesday May 18, 2021 5:00 am CT on KETKY
  • Tuesday May 18, 2021 2:30 pm ET on KETKY
  • Tuesday May 18, 2021 1:30 pm CT on KETKY
  • Tuesday May 18, 2021 11:00 pm ET on KETKY
  • Tuesday May 18, 2021 10:00 pm CT on KETKY
  • Wednesday May 19, 2021 1:00 am ET on KETKY
  • Wednesday May 19, 2021 12:00 am CT on KETKY
  • Wednesday May 19, 2021 9:30 am ET on KETKY
  • Wednesday May 19, 2021 8:30 am CT on KETKY
  • Wednesday May 19, 2021 6:00 pm ET on KETKY
  • Wednesday May 19, 2021 5:00 pm CT on KETKY
Jump to Upcoming Airdates

Recent

Voting Rights and Election Laws

  • Wednesday April 21, 2021 6:00 pm ET on KETKY
  • Wednesday April 21, 2021 5:00 pm CT on KETKY
  • Wednesday April 21, 2021 1:00 am ET on KETKY
  • Wednesday April 21, 2021 12:00 am CT on KETKY
  • Tuesday April 20, 2021 11:00 pm ET on KETKY
  • Tuesday April 20, 2021 10:00 pm CT on KETKY
  • Tuesday April 20, 2021 2:30 pm ET on KETKY
  • Tuesday April 20, 2021 1:30 pm CT on KETKY
  • Tuesday April 20, 2021 6:00 am ET on KETKY
  • Tuesday April 20, 2021 5:00 am CT on KETKY
  • Monday April 19, 2021 8:00 pm ET on KET
  • Monday April 19, 2021 7:00 pm CT on KET

Recap of the 2021 Kentucky General Assembly

  • Wednesday April 14, 2021 6:00 pm ET on KETKY
  • Wednesday April 14, 2021 5:00 pm CT on KETKY
  • Wednesday April 14, 2021 9:30 am ET on KETKY
  • Wednesday April 14, 2021 8:30 am CT on KETKY
  • Wednesday April 14, 2021 1:00 am ET on KETKY
  • Wednesday April 14, 2021 12:00 am CT on KETKY
  • Tuesday April 13, 2021 11:00 pm ET on KETKY
  • Tuesday April 13, 2021 10:00 pm CT on KETKY
  • Tuesday April 13, 2021 2:30 pm ET on KETKY
  • Tuesday April 13, 2021 1:30 pm CT on KETKY
  • Tuesday April 13, 2021 6:00 am ET on KETKY
  • Tuesday April 13, 2021 5:00 am CT on KETKY
  • Monday April 12, 2021 8:00 pm ET on KET
  • Monday April 12, 2021 7:00 pm CT on KET

2021 Legislative Session

  • Wednesday March 31, 2021 6:00 pm ET on KETKY
  • Wednesday March 31, 2021 5:00 pm CT on KETKY
  • Wednesday March 31, 2021 9:30 am ET on KETKY
  • Wednesday March 31, 2021 8:30 am CT on KETKY
  • Wednesday March 31, 2021 1:00 am ET on KETKY
  • Wednesday March 31, 2021 12:00 am CT on KETKY
  • Tuesday March 30, 2021 11:48 pm ET on KETKY
  • Tuesday March 30, 2021 10:48 pm CT on KETKY
  • Tuesday March 30, 2021 6:00 am ET on KETKY
  • Tuesday March 30, 2021 5:00 am CT on KETKY
  • Monday March 29, 2021 8:00 pm ET on KET
  • Monday March 29, 2021 7:00 pm CT on KET

School Choice

  • Wednesday March 24, 2021 6:00 pm ET on KETKY
  • Wednesday March 24, 2021 5:00 pm CT on KETKY
  • Wednesday March 24, 2021 9:30 am ET on KETKY
  • Wednesday March 24, 2021 8:30 am CT on KETKY
  • Wednesday March 24, 2021 1:00 am ET on KETKY
  • Wednesday March 24, 2021 12:00 am CT on KETKY
  • Tuesday March 23, 2021 11:00 pm ET on KETKY
  • Tuesday March 23, 2021 10:00 pm CT on KETKY
  • Tuesday March 23, 2021 2:30 pm ET on KETKY
  • Tuesday March 23, 2021 1:30 pm CT on KETKY
  • Tuesday March 23, 2021 6:00 am ET on KETKY
  • Tuesday March 23, 2021 5:00 am CT on KETKY
  • Monday March 22, 2021 8:00 pm ET on KET
  • Monday March 22, 2021 7:00 pm CT on KET
Top

Season 28 Episodes

Voting Rights and Election Laws

S28 E12 Length 56:33 Premiere Date 4.20.21

The 2021 General Assembly: Debating Major Legislation

S28 E11 Length 56:34 Premiere Date 4.12.21

Wrapping Up the 2021 General Assembly

S28 E10 Length 56:34 Premiere Date 3.29.21

School Choice in Kentucky

S28 E9 Length 56:33 Premiere Date 3.22.21

No-Knock Warrants

S28 E8 Length 56:33 Premiere Date 3.15.21

Proposed Legislation to Modify Kentucky Teachers' Pensions

S28 E6 Length 56:34 Premiere Date 2.22.21

Debating Historical Horse Racing Legislation

S28 E5 Length 56:33 Premiere Date 2.8.21

New Lawmakers in the 2021 Kentucky General Assembly

S28 E4 Length 56:34 Premiere Date 2.1.21

A Nation Divided

S28 E3 Length 56:33 Premiere Date 1.18.21

Recapping the Start of the 2021 General Assembly

S28 E2 Length 56:34 Premiere Date 1.11.21

Previewing the 2021 General Assembly

S28 E1 Length 56:33 Premiere Date 1.4.21

About

Kentucky Tonight, hosted by Renee Shaw, is a public affairs discussion program broadcasted live on Monday nights at 8/7c on KET and KET.org/live.

Viewers with questions and comments may send e-mail to kytonight@ket.org or use the message form on this page. All messages should include first and last name and town or county. The phone number for viewer calls during the program is 1-800-494-7605.

After broadcast, Kentucky Tonight programs are available on KET.org and via podcast (iTunes or Android). Files are normally accessible within 24 hours after the television broadcast.

Kentucky Tonightwas awarded a 1997 regional Emmy by the Ohio Valley Chapter of the National Academy of Television Arts and Sciences. The series was also honored with a 1995 regional Emmy nomination.

To purchase a DVD:

Call 1-800-945-9167 or e-mail shop@ket.org.

Contact

Explore KET