Lewis files HB 504 to address the teacher pension problem

February 27, 2019 | 3:09 am

Updated February 27, 2019 | 7:56 am

After the Kentucky Supreme Court struck down the General Assembly’s pension reform bill in December 2018, newly elected state representative Scott Lewis (R) from Hartford filed a pension reform bill on Wednesday, Feb. 20. | Photo contributed by Scott Lewis

After the Kentucky Supreme Court struck down the General Assembly’s pension reform bill in December 2018, newly elected state representative Scott Lewis (R) from Hartford filed a pension reform bill on Wednesday, Feb. 20. Lewis’s bill was filed just hours before the deadline to file proposals for consideration during the regular session.

House Bill 504, a 108-page document, deals with the pensions of Kentucky teachers and is focused on keeping new hires in a defined benefit plan — a plan that current teachers have been enrolled in for years. However, there are a number of differences between what is outlined in Lewis’ bill and the existing defined benefit plan.

HB 504 only addresses teachers’ pensions in the Teachers Retirement System. If HB 504 is passed, it would affect new teachers hired on or after Jan. 1, 2020.

The bill describes changes in the benefit plan for new teachers, including a requirement that teachers retire at age 55 instead of the traditional 27-year retirement plan required for current teachers across the state.

Lewis said the addition of an age requirement in HB 504 won’t be an extreme change for newly hired teachers.

“At some point, years ago, the retirement requirement was after 30 years of teaching,” Lewis said. “This is actually going back to what the pension system looked like before.”

HB 504 will lower employer contributions toward new teachers, something Lewis said has gotten some criticism. For new hires, the state will pitch in 10.75 percent compared to 13.1 percent that current teachers in the Teachers Retirement System receive. Moreover, new hires will be required to pay in more toward their retirement through HB 504. Employee contributions will increase from the current rate of 12.86 percent to 13.75 percent under the new pension reform bill.

“We’ve still got the ones out there who say, ‘We shouldn’t give up anything,’” Lewis said. “But that’s just not an option at this point.”

Kentucky currently has an unfunded pension liability of $43 billion in the state’s public retirement plan. Lewis has said his bill would save $335 million over the course of 20 years.

Teachers across the state openly objected and protested against a bill — commonly referred to as “The Sewer Bill” — passed by the General Assembly a year ago. That pension reform bill would have placed new teachers into a retirement plan similar to a 401(k). Lawmakers rushed the bill through, which was why the Kentucky Supreme Court deemed it unconstitutional.

Instead of teachers taking out a 401(k) toward their retirement, HB 504 ensures that teachers will remain in a defined benefit plan.

After the “Sewer Bill” was struck down by the Supreme Court, Governor Matt Bevin called a special session right before Christmas, hoping to pass the bill again. Lawmakers gathered in Frankfort, but the session was adjourned after two days without a resolution.

Lewis, a former educator and superintendent for the Ohio County school district, said he has a great understanding of educators and what they want from the state. Lewis also understands the anxieties many of them have expressed over the last year. Lewis worked with educators and those from the Teachers Retirement System as he developed HB 504.

“Well, I’ve lived it, especially last year in the school district. It’s something I’ve lived with every day,” Lewis said. “You get the people it affects together, and that’s how you understand their perspective. The groups involved thought [HB 504] was a compromise. It’s also cheaper on the state. I feel good about this bill, and I hope it gains some traction, so we can take some of the anxiety off these teachers.”

February 27, 2019 | 3:09 am

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