State Representative Ed Massey has filed a bill, House Bill 258, to change the Kentucky Teachers Retirement Pension plan for teachers hired after Jan. 1, 2022. While Massey has some soothing words — as do others — do not be deceived. This is definitely an inferior retirement, and the opening salvo in a game of divide and conquer.
HB258 would require teachers to split their retirement contributions between a defined-benefit plan (what you normally think of when you think “pension”) and a defined-contribution plan (basically, a 401k). Right now, teachers pay 12.855% of their salary toward their retirement, matched by 13.105% by the state. In the new plan, teachers hired after Jan.1, 2022, would put 9% of their salary into the defined-benefit (real pension) plan, matched by the state at 8%, with both the teacher and the state putting up to 2% each in the defined-contribution plan.
Time for math. (We’ll round the numbers to make the math easier.)
- Current plan: 13% + 13% = 26% going toward retirement
- Proposed plan: 9% + 8% + 2% + 2% = 21% going toward retirement
Which one do you think teachers should support?
Also bear in mind that the 2 + 2 is in a 401(k)-style plan with no guaranteed return. There’s no way this is not, in essence, a pay cut for new hires, who will have to set aside an additional 5% to 10% of their wages to have the same level of retirement as current teachers.
JCTA President Brent McKim has lauded this bill as
“what we have been able to accomplish with our lobbying of and ongoing dialog with Republican legislators from the House and Senate with regard to what the benefits would look like for a new TRS tier (for future hires) in the draft bill being sponsored by Representative Ed Massey …
“Our new reality is a General Assembly in which 75% of the House seats and 80% of the Senate seats are held by Republican Legislators, and this is the case with House legislative districts drawn by the Democrats when they were in control of the House. In the near future, the Republicans will redraw House and Senate legislative districts, so the GOP is likely to expand/consolidate its majorities in both chambers.
“Consequently, your JCTA lobbyists have been reaching out to majority party legislators to build and strengthen relationships. This has made it possible to make this sort of progress regarding what the GOP is proposing for a new TRS tier. We have come a long way from the “Sewer Bill,” which did not even include a defined benefit plan design for future teachers.”
With all due respect to Brent McKim, our moral obligation is to not throw new hires under the school bus. But sometimes, on rare occasions, the right thing and the politically savvy thing aligns.
This is divide-and-conquer, plain and simple. In five years, when one-third of teachers are under this new plan, the Kentucky legislature will come for the rest of us. You can count on that. And the one-third of teachers who were thrown under the bus will remember that. Will they then stand up for us then? No! And, who can blame them?
Supporting HB 258 — whether you’re set on “reaching out to majority party legislators to build and strengthen relationships,” or can’t do the math, or simply find new hires expendable — will do nothing but pave the way to ending pensions for everyone, one bit at a time. The Wobblies (Industrial Workers of the World) had a slogan: “An injury to one is an injury to all.” That couldn’t be truer with HB 258 – it’s just one more step in a divide-and-conquer strategy.
— to forwardky.com