President of Letcher Co. teachers group says Teachers' Retirement System will collapse if legislators create a tiered system of benefits for current teachers based on longevity

Mountain Eagle, Whitesburg, Sept. 13, 2017

Local teachers react to pension crisis

By SAM ADAMS

Some teachers are predicting dire consequences if the state legislature approves pension plan changes suggested two weeks ago by a private accounting company hired by Governor Matt Bevin.

“All this with the budget and the pensions has the potential of destroying our public system,” said Jon Henrikson.

The PFM Group made the report August 27, recommending teachers be switched from their current defined-benefit retirement plan to a 401K plan, and that the retirement age be raised to 65. Other state employees were also in line for changes, such as raising the age for state troopers to retire to 60.

Henrikson, of Carcassonne, retired 20 years ago from teaching after 29 years in the classroom. He said to move new teachers out of the Kentucky Teacher Retirement System and into 401K retirement plans and Social Security will only make the pension system less solvent, and force more older teachers out.

“There’s already a teacher shortage in this county and virtually everywhere else in the country,” he said. “If they mess with the retirement system, they’re not going to get people to go into teaching, and some of the people already teaching are going to quit.”

No bill has been made public, but Regina Brown, president of the Letcher County Teachers Organization, said Republican leadership in the House is telling constituents that the Teacher Retirement System may switch to a “tiered system” where teachers with over 15 years of service would get most of the benefits they receive now, but teachers with 1 to 14 years would get fewer benefits, and new hires would go into a retirement system such as a 401K with a defined contribution, but no defined benefit.

“With teachers not being able to draw Social Security, that set them up for a death sentence,” Brown said. “What happens is those of us that are 15 years and over and those that have already retired will have no new money going into the system, and then what happens? The system collapses.”

Teachers now are eligible to retire after 27 years. About 13,400 teachers across Kentucky — more than 40 percent of all teachers in the state — are eligible to retire this year. Brown said she believes many may take that option because of the uncertainty in the retirement system.

“I’m scared to death I’m not going to have money to draw out now,” she said.

One of the suggestions made by the accounting firm was that existing retirees lose their cost-of-living increases that they were given from 1996 to 2012. That could amount to a 30 percent pay cut for some retirees.

Henrikson said if the state chooses to do that, it will be “in for a pile of lawsuits.”

Letcher County School Superintendent Tony Sergent said a statement by the governor last week saying any change made would not take effect immediately had calmed fears for some, but teachers could still start retiring if they think their pensions are going to be changed.

“We’ve got a lot of people worried, but we haven’t had anybody come in and say they’re retiring,” he said.

He said the way the system is set up now, teachers can “buy time” with unused sick days, and “it might be worth it” if the changes are too drastic and teachers want to retire early to avoid having their benefits taken away.

Sergent said he understands teachers’ concerns because he has enough time in to retire, too. “This is my 30th year,” he said.

Brown blamed the worry and uncertainty on the governor, speculating that damaging public education would forward his goal of creating charter schools in the state, something the legislature approved during the last session. She said she also felt threatened by the governor’s comments on a live Facebook video saying that if teachers “think so little of their responsibility and their obligation to their students and the families that they’re responsible to that they would literally walk out on their classroom in their own self-interest, that’s an unfortunate decision that I would hope a teacher would not make.” While Bevin went on to say the bill he hopes to pass would not make that necessary, if teachers do feel that way, “they should retire.” Bevin also accused some teachers of hoarding sick days to “artificially” increase their salary prior to retirement.

Brown said she has 29 years in the system and doesn’t take sick days unless it’s completely unavoidable because she doesn’t think it’s fair to kids. Now that she is an administrator and isn’t in the classroom, she still doesn’t take sick days because there is no one to substitute for her. She said she could have retired two years ago, but, “I don’t want to retire. I love my job.”

She said she feels like she is being forced toward retirement, because she’s worried if she waits, the legislature will take away the benefits she was promised when she first began teaching.

“I’m scared to death because we have Republican Senate and a Republican House that don’t know how to tell the governor, ‘No,’” Brown said. “At the end of the day, we have a governor who is a bully.”

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