Many teachers, especially young ones, don’t think much about their pension situation until 27+ years of service rolls around, and they begin considering retirement. However, if you’ve been following FCEA on Facebook and Twitter, or reading this newsletter, you realize the Teacher Retirement System of Kentucky isn’t in good shape after many years of underfunding by Kentucky’s governors and lawmakers.
So, what exactly does that mean for you?
Well, while the money poured into the pension system last year was much needed and appreciated, it still cannot make up for chronic underfunding. As a result, the governor, legislators, and others seem to be floating the idea of benefit cuts for current employees and retirees, as well as incoming new teachers. These possibilities include implementing 401K plans, increasing the retirement age for CURRENT employees, changes to retiree health care benefits, eliminating payment for sick days upon retirement, and more.
Some people have even suggested that the pension reform will be “painful” to everyone. In a recent interview, David Eager, the interim director for Kentucky Retirement Systems, discussed the KY pension systems. Around the 9:26 min. mark, he offers some specific glimpses into what may happen to teacher pensions with the “reform.”
However, FCEA wants to be clear that teachers and support staff have already felt pain through personal pension contributions of almost 13% and increased health care costs to ensure health care during retirement. These were compromises worked out some years back in an effort to get the system back on sound footing.
Legislators say they are waiting for more information from the Kentucky Retirement Systems’ audit report, which should be released soon. We’ll keep members updated on developments, but remember this … Kentucky educators get little to no Social Security benefits, and that includes spousal benefits, due to the Windfall Elimination Provision (WEP).
Your pension will determine if you retire with dignity and security. Be ready to take action.