FRANKFORT, Ky. (WKYT) - Senate President Robert Stivers answered many questions and voiced some frustrations with what he calls misinformation about the plan to fix Kentucky's pension crisis. Stivers says lawmakers have been talking about for ten years now about the state of the pension system.
"I hear a lot 'Why haven't you all spoken up about this'? (Shows stack of articles from 2007 on) We have been talking about this for ten years, ten long years, that there needed to be a fix. Because we truly do value our public employees and we truly value our teachers," Stivers said.
The proposed pension plan says current teachers are still eligible for their full pension after 27 years of teaching, but once they've taught that long or reach the age of 60, they will moved to 401(K)-style plan. Teachers hired after July 1, 2018 will also be on that defined-contribution plan.
"We want to do the best we can to come up with a fair plan to guarantee them as much benefits as we can when the systems are broken, not the funding mechanisms, the systems are broken."
Many teachers are voicing their concerns saying they fear the proposed plan will discourage young people from entering their profession. Stivers says those raising questions about the governor's plan, specifically teachers, should be asking their retirement system leaders why they didn’t ask for a statutory change.
Stivers said, "I want every single teacher who hears my voice to go out and say wait if 15 percent of the problem according to the PFM report or 10 percent according to teacher retirement system report is the funding mechanism of this, what happened to the other 85-90 percent. Who is asking the board and the KTRS system and the KERS system, what happened for all those years? Where did this go wrong? Why didn't you ask for statutory change?"
The Kentucky Education Association responded to Stiver's comments releasing a statement saying, "The data included in the memo was based on information provided by TRS (Teachers' Retirement System) in response to a very specific, limited legislative request about the system for the period from 2007 to 2013. That six-year time frame included the period of the greatest economic downturn in U.S. history, other than the Great Depression. Any entity – not just the public pension systems – judged by economic data from that period of time will be found wanting. Because it is a very large pension system, TRS is a long-term investor. As with any long-term investor, financial success or failure of the system is appropriately measured by a much longer period of time, at least 20 to 30 years."
The statement from KEA also claims that TRS did ask for additional funding through the years. "TRS requested, and received, additional ARC funding during the 2006-08 biennium. However, beginning with the 2008-10 biennium and continuing through 2014-16, the additional funding was requested but was not provided. Every budget request from TRS during that time included a request for the necessary additional ARC funding. TRS budget requests are sent directly to the legislature and the governor. Any suggestion that the legislature did not know that additional funding was needed or that funding was consistently requested is simply incorrect."
The KEA says while its a convenient argument to make, TRS management and investment returns are not the issue.
Stivers commended Governor Bevin saying during his time in Frankfort, the governor is the first person in the executive branch to actually step up and address the pension issue.
The KEA also applauding the Governor and legislative leadership for funding 94% of the additional ARC funding requested for the 2016-2018 bieenium.