Kentucky (US) lawmakers trying to revamp teacher pensions

teacher pensions

As Kentucky teachers do not pay into Social Security, their pension is their only source of income after retirement

A bill to revamp the retirement of Kentucky’s (US) teachers is making its way through the General Assembly. While supporters believe the legislation is necessary to keep the retirement system intact, others believe it is not needed.

As Kentucky teachers do not pay into Social Security, their pension is their only source of income after retirement. Representative Ed Massey is the sponsor of House Bill 258 that put new teachers hired in Kentucky into a new tier in the pension system that is fully funded.

I do believe a pension is a promise. We are obligated to fulfil that, but if we continue to have this ongoing deficit and costs continue to rise there will be a day of reckoning, said Representative Massey, (R) Hebron.

While state law indicates the requirements for contributing to the Teacher Pension System, Massey says the problem is what is actually needed, is not being contributed, indicating a deficit in the system.

That deficit has to be retired somehow. There is only two ways to do that. One is to decrease benefits. The other is to raise taxes, said Representative Massey.

Greta Gilbert, a teacher in Floyd County is concerned about House Bill 258.

It places new hires in a different tier. All the research has shown that if the plan is funded appropriately and consistently every year it does not need to be changed. It will survive, said Gilbert.

Thousands of teachers across Kentucky travelled to the State Capital nearly three years ago to protest when lawmakers tried to make changes to the retirement system.

They are taking things away from us at a time when we can’t fight for ourselves. We can’t be there in person because of the pandemic, said Gilbert.

I believe that bill is a pay cut to our teachers at a time when we need more and more qualified and bright young people to go into teaching, said Governor Andy Beshear, (D) Kentucky.

Massey says he would welcome input from Governor Beshear on the bill.

This year in my budget we fully funded all our pension systems and we have an extra $600-million to invest, said Governor Beshear.

The increasing cost of this program and paying the deficit means that we are spending our money to fix this problem instead of really benefiting our educators. We know this new hire bill will have some surpluses, said Representative Massey.

Massey says he has received input and the endorsement from several education groups.

The legislation is currently in the Senate after it was passed by the House.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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