KY Teacher Retirement - a cooperative success story
KY State Treasurer Todd Hollenbach
Kentucky’s teachers have a reasonable retirement benefit, funded in large part by mandatory deductions of greater than 10% of their pay during their careers. Teachers do not participate in Social Security and rely on their Kentucky pension benefit for retirement security. The Kentucky Teachers’ Retirement System has been providing retirement security to teachers for more than 70 years and has some of the lowest plan administration costs of any public plan in the country. Unlike the all or nothing stand-offs that appear to be escalating between public employees, legislatures and executive branches in several states, all of our coalition members placed the common goal of finding a workable solution first and crafted legislation (H.B. 540) creating a sustainable method of funding these critical benefits. It is noteworthy that Kentucky teachers voluntarily agreed to a significant increase in their monetary contribution to make a solution possible. And, in a remarkable testament to the efforts of all involved, both chambers of the General Assembly passed the legislation unanimously. The “shared responsibility” solution appears to be working very well. With everyone living up to the terms of the compromise, we managed to eliminate $3.3 billion in future unfunded taxpayer liability while simultaneously protecting medical benefits for retired teachers. In short, the solution is good for teachers, good for taxpayers, and good for the Commonwealth of Kentucky. Although there is still much to do in addressing public pension issues, it is important that we give credit where it is due and to that end the coalition members, and Kentucky teachers in particular, deserve to be commended. Perhaps a few of our sister states appearing in the news could benefit from taking note of this Kentucky success story. Todd Hollenbach
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