Lewis files pension bill that would affect new teachers hired after 2020

Feb. 22-- Feb. 22--Rep. Scott Lewis, a former school superintendent and member of the General Assembly's working group on public pensions, filed a bill Wednesday that would raise the retirement age for new teachers hired after 2020.

Lewis, a Hartford Republican and former Ohio County Schools superintendent, filed House Bill 504 along with Rep. Travis Brenda, a Cartersville Republican. Brenda is a teacher with the Rockcastle Board of Education.

The bill affects only teachers hired after Jan. 1 of next year and would require a teacher be at least 55 years old to be eligible to receive full retirement benefits.

Lewis said Thursday the bill creates two retirement plans for new teachers -- a "foundational" plan where both the teacher and the state contribute 8 percent of the teacher's salary into the plan, and a "supplemental" benefit, where the teacher and the state would both contribute 2 percent.

The bill, if approved, "keeps new hired in a defined benefit plan, which is really important because teachers can't draw Social Security," Lewis said. The bill makes no changes to the benefits of working teachers.

"We didn't want to affect current employees or current retirees," Lewis said.

New teachers hired in 2020 or after would have to work until age 55 to receive full benefits. Currently, a teacher has to put in 27 years of service to receive full benefits.

Teachers who work after age 55 will receive an enhanced retirement benefit, Lewis said.

"Each year that you stay after age 55, your retirement benefit goes up," Lewis said. "It really encourages people to stay longer in the profession."

The benefit plans set up in the bill would be 100 percent funded at the start. If the funding level of the "foundational" benefit ever fell below 90 percent, a mechanism would kick in to funnel money into the system from a "stabilization reserve account" set up with a portion of the teachers' and the state's retirement contributions, Lewis said.

If that weren't sufficient, the Teachers Retirement System board could take other steps. Those are using contributions from the supplemental benefit and adjusting the plan's interest rate or benefit factor, or by changing the retirement age or number of years a teacher would have to teach in order to receive full benefits.

Lewis said the steps would have to be followed in that order, so a TRS board decision to change the retirement age wouldn't occur until everything else had been tried.

"Teachers make up the (TRS) board," Lewis said. "There would have to be something drastic to happen in the market" for the TRS board to change the retirement age.

Groups such as TRS and the Kentucky Education Association were involved in crafting the bill.

"All of the groups were involved in this bill," Lewis said. "We included all the stakeholders and stakeholder groups."

The bill, if approved, would make a small dent in the unfunded liability in the teacher retirement system, with a portion of contributions going toward that deficit, Lewis said. In November, TRS reported it had 57.7 percent of the funds needed to cover current and future retirees, according to the Louisville Courier-Journal.

Lewis said there is time to pass the bill during the session "if the majority leadership wants to make it a priority."

"What this (bill) does moving forward is it doesn't add anything to the unfunded liability," Lewis said.

James Mayse, 270-691-7303, [email protected], Twitter: @JamesMayse

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