KSBA “will push strongly for this to be one of the reforms that is enacted in the special session,” Kennedy said. Other groups supporting separation include the Kentucky Education Association, which represents education support personnel, and the Kentucky League of Cities. The idea has taken root because the CERS is better funded than the state employee retirement system. CERS employers, including school districts, by law must make whatever contribution is calculated by the system’s actuaries. The General Assembly, which provides funding for the state system, has no such mandate, which is one reason the CERS is healthier.
Moreover, CERS has the largest portion of assets – about 57 percent of the total amount – in the KRS pension funds, Kennedy pointed out, and pays administrative costs proportionately. And he noted that school classified employees comprise nearly 52 percent of the CERS employees.
“So school boards have a major stake in this,” he said.
A bill for CERS separation did not advance in the 2017 legislature. It proposed a four-year phase-in for the split, with a separate board and staff similar to the way the Teachers’ Retirement System is structured.
Flynn, the Simpson County Schools superintendent, said he’s hopeful a CERS separation will affect the assumptions in a positive way so districts won’t have to contribute as much to the system as projected.
If the CERS is not separated, it could more likely face any benefit cuts the General Assembly might make to the overall KRS as part of pension reform, a blow to recruiting already hard-to-fill positions for school districts, like bus drivers. “We have to have quality benefits to attract employees,” Kennedy said.