Teachers across Kentucky are giving mixed reviews on a new plan to reform the state’s retirement systems for public sector workers.
One Warren County teacher credits lawmakers for making compromises, but says the legislation still balances pension reform on the backs of public servants.
Kim Coomer teaches high school students at the Warren County Area Technology Center. She praises lawmakers for not forcing current teachers into defined contribution, or 401(k)-style plans. Coomer says having a guaranteed benefit is important for teachers because they don’t get social security benefits to act as a buffer in retirement.
"For us to have a defined benefit plan is a perk of teaching," Coomer told WKU Public Radio. "The salaries are not that high, the hours are long, but we love what we do and we're so thankful that we do have that defined benefit plan."
Coomer does have concerns about putting new teachers into a cash-hybrid plan, which would only guarantee they wouldn’t lose money from an under-performing stock market. Hybrid plans are a blend of 401(k)-style plans and defined benefits plans. They're individual accounts that guarantee employees a minimum return on their investments. Coomer fears the hybrid approach won't offer new hires the same pension security that current teachers have because hybrid plans have too strong of a dependence on the 401(k) system and an uncertain stock market.
She also disagrees with temporarily cutting in half annual cost-of-living adjustments. Under the proposal from legislative leaders, COLA increases would drop from 1.5 percent to 0.75 percent for 12 years.
The bill also prohibits teachers from using accumulated sick days to reach retirement eligibility faster, but the legislation doesn't require them to pay an extra three percent of their salaries for retiree health care.
Coomer says teachers have made their pension contributions, while lawmakers failed to fully fund the retirement systems in previous years. The $40 billion shortfall in Kentucky's two pension systems is also blamed on inaccurate assumptions about payroll growth and under-performing investments.
Coomer says it’s not right to make teachers and other public sector workers take cuts and lose benefits. Instead, she says lawmakers need to look at tax reform and new sources of revenue to shore up the pension systems.
Overall, Coomer says she credits lawmakers for addressing many of the concerns that teachers raised under Governor Bevin’s pension proposal, but adds the bill still needs to undergo some changes.
"It isn’t right and they need to continue to work to make this right," said Coomer. "We are watching and we vote."
The bill is expected to get its first hearing before the Senate State and Local Government Committee next week.