Kentucky Teacher Retirement System


Gov. Matt Bevin’s proposal for how Kentucky should spend public money over the next two years would eliminate the state’s share of funding for health insurance used by retired teachers.

Bevin’s budget would also do away with subsidies that about 3,500 employees use to pay for health insurance of dependents.

During a meeting of the Public Pension Oversight Board, budget director John Chilton said the state can’t afford the programs.

Kentucky Educators Announce Pension Reform Plan

Nov 6, 2017
Creative Commons

Leaders from several Kentucky education groups have announced a pension reform plan that they say is a sustainable approach.

The Courier Journal reports the plan announced Monday would leave most retirement benefits in place for current and retired teachers, while a hybrid plan would be created for new teachers hired beginning next summer. Those teachers would participate in a defined benefit system and be able to supplement retirement savings with voluntary contributions to an investment account.

Flickr/Creative Commons/ NCSSM

Solutions to Kentucky’s pension crisis proposed by Gov. Matt Bevin and Republican lawmakers have stirred opposition from educators.

One of the proposals that concerns Somerset Independent Schools Superintendent Kyle Lively is that unused sick days would no longer be calculated into teacher pension benefits after July 2023. He said that change could have a dramatic impact on his district’s 137 teachers and administrators, because a large percentage of them are the 22- to-23-year mark in their careers. He fears they may decide to retire earlier than they had planned.

Creative Commons

The superintendent of Owensboro Public Schools says the pension proposal unveiled by Kentucky’s Republican leaders is "second-rate" compared to the current retirement system. 

Dr. Nick Brake applauds GOP leaders for not raising the retirement age to 65 for teachers, but fears that other reforms, if enacted, would make it harder for the state to attract quality educators.

Thousands of public employees and teachers in Kentucky are waiting with nervous anticipation to find out what changes Kentucky lawmakers will make to their retirement plans.  The pension systems face massive shortfalls and have been rated among the worst in the country. 

Employers also have skin in the game as skyrocketing pension costs threaten their budgets and daily operations.  In a letter last month to all employers in the Kentucky Employee Retirement System, or KERS, State Budget Director John Chilton warned that pension costs could rise to as much as 84 percent of payroll in the next budget.

"As a non-profit, we’ve got no place to get that," said Finance Director Debbie Chandler at Barren River Area Safe Space.

Mixed Returns For Kentucky Public Pensions

May 5, 2014

Financial documents show that the Kentucky Retirement Systems dramatically underperformed last year, when compared to its cousin, the Kentucky Teachers Retirement System.

Last year, the Kentucky Retirement Systems' investment portfolio brought in about one billion dollars less than the Kentucky Teachers Retirement System.

According to Chris Tobe, a former trustee to the Kentucky Retirement Systems turned whistleblower, that means Kentucky is home to one of the best-performing public pensions, and, in the case of KRS, one of the worst.

“It really kind of tells you all the things wrong with the pension plan as far as administration. And all the right things to do,” said Tobe.

Moreover, last year the KRS underperformed the average public pension's investment plan by about $500 million.

Tobe says last year was such a bad year for the pension that KRS’ portfolio must outperform its projections for the next five years to make up for the hit.