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Teachers' outrage over pension bill closes Kentucky schools

By Susan McFarland

March 30 (UPI) -- After months of Kentucky lawmakers grappling with a teachers retirement issue, a bill overhauling the state's pension system was approved.

Outraged teachers protested outside the capitol in Frankfort as the 291-page proposal was debated late into the night -- and Friday morning, two school districts had to shut their doors because too many teachers took the day off.

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Kentucky Gov. Matt Bevin gave final approval for the bill, which Republican lawmakers say is a compromise intended to help with unfunded liability of more than $40 billion.

"Tonight 49 members of the Kentucky House and 22 members of the Kentucky Senate voted not to keep kicking the pension problem down the road," Bevin said on Twitter. "Anyone who will receive a retirement check in the years ahead owes a deep debt of gratitude to these 71 men & women who did the right thing."

Instead of a traditional pension, the new plan places teachers hired after Jan. 1, 2019, in a hybrid cash-balance plan in the Teachers' Retirement System of Kentucky. Cash-balance plans are less generous than a traditional pension but have more security than a 401(k).

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For future teachers, retirement eligibility will increase to age 65 with five years of service or the "rule of 87," when the employees' combined age and years of service equal 87. The annual 1.5 percent cost-of-living adjustments for retired teachers will remain intact, something that was a controversial part of the bill.

Advocacy groups protested because the public had no chance to review the changes to the pension system.

Jim Carroll, spokesman for Kentucky Government Retirees, said the latest version of the pension bill assaults the contract rights of most employees.

"There is no reason to believe it will produce significant reduction in liabilities. KRS stakeholders remain adamantly opposed to changes to a pension system that was comprehensively reformed just five years ago," Carroll said.

Brent McKim, president of the Jefferson County Teachers Association, said forcing new teachers into a cash-balance retirement plan will hurt their retirement security and undermine the state's ability to compete for quality educators.

"Also, rushing the bill through without an impact analysis, as required by law, is not democratic and invites expensive litigation that could void the bill if it is passed into law," McKim said.

Teachers plan to continue protest of the changes. At least two school districts, Fayette and Jefferson counties, had to close Friday because too many teachers called in sick. also closed Friday due to teacher absences.

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Jefferson County Public School sent a statement saying the volume of absences left the district unable to "safely cover a large number of classes with substitute teachers."

McKim said the union will challenge the bill on constitutional grounds because he said lawmakers broke state law by passing the bill without an actuarial analysis.

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