'Frontline' Examines Woes of Kentucky's Underfunded Teacher Pension Plan
PBS' "Frontline" delves into the challenges facing underfunded teacher pension plans in Tuesday's episode. With a focus on Kentucky, correspondent Martin Smith starts off by visiting the 2018 Kentucky Derby at Churchill Downs and making a $100 bet (to win) on a horse with a name tailor-made for the topic: Promises Fulfilled.
Although the horse started strong, Promises Fulfilled finished 15th in a field of 20 in the Derby last May. That gives Smith a metaphor for his report on the complex topic of public pensions.
"This is a story about gambling and making bad bets," the correspondent says. "It's about having your retirement that you thought was secure go south."
What follows in "The Pension Gamble," airing Oct. 23 at 10 p.m. Eastern (Check local listings), is a detailed look into Kentucky's retirement systems, which have long offered traditional defined-benefit retirement plans to the state's teachers, police officers, firefighters, and other public employees and was doing well with keeping well-funded for its obligations until the 2008 recession.
Randy Wieck, a high school history teacher in Louisville, tells "Frontline" about the basic deal underlying the teachers' pension plan, known as Teachers' Retirement System Kentucky.
"One of the reasons we accept the low salary is that we won't have to despair for our retirement," Wieck says. "That there will be some form of a safety net for us when we get too old to trundle into the classroom. It's a promise."
But as many teachers and other public employees across the country are learning, they increasingly have placed their bets on a horse called "Promises Unfilfilled."
"Frontline" delves into management issues and controversies involving the Kentucky Retirement Systems, which oversees the pension plans for public employees besides teachers, as well as recent political battles in the state. As Education Week's Daarel Burnette II and Madeline Will reported last spring, Kentucky's pension crisis "has sparked teacher walkouts, lawsuits, and raucous protests" at the state capitol in Frankfort.
Kentucky's teachers' retirement system was cited by Standard & Poor's last year as the worst-funded in the nation, Barnette and Will reported. The state is $14.5 billion short of what it will need to cover the retirement costs for its 71,000 current teachers and 51,000 retirees over the next 30 years.
"Frontline" interviews Republican Gov. Matt Bevin, who has bolstered state payments into the system but is still a target of criticism by teachers for backing plans to move new teachers out of the defined-benefit pension plan into more of a hybrid "cash-balance" plan, which is more of a mix of a defined-benefit plan and 401(K)-type retirement savings plan.
The state legislature adopted such a plan last spring that affects teachers hired beyond the start of 2019 and requiring school districts to contribute 2 percent of teacher salaries to their pension plans.
"I'm trying to save a system that needs to be saved," Bevin says in the episode.
With interviews with lawmakers, finance experts, other teachers, and Kentucky reporters who have covered the pension system's woes for years, as well as colorful footage of teacher protests and confrontations with legislators, "Frontline" makes the complex topic of public pension woes pretty lively.