Last week was a busy time in the world of teacher pension systems. Politicians in three states have been reckoning with how to address retirement systems that are drastically underfunded.
In Kentucky, as of June 30, 2015, the state’s teacher-retirement system had a $24.43 billion unfunded liability and the situation has only been getting worse as the system lost $1.2 billion during the last fiscal year. The pension system only has 42 cents on hand for every $1 it owes its members, according to a lawsuit filed by a group of current and former teachers. The suit attempts to force top state officials to “perform their constitutional and statutory duties” by adequately funding the pension system.
Responding to the lawsuit, Amanda Stamper, spokeswoman for Governor Matt Bevin, told the Associated Press that fixing the state’s troubled pension systems has been a top priority for the Republican governor who took office late last year.
“The Bevin administration is intent on fixing the country’s worst-funded pension system,” she said. “Kentucky taxpayers, retirees, and current employees deserve nothing less.”
On Monday, Kentucky General Counsel Beau Barnes told the state’s pension oversight board that there is some hope in sight as the legislature had voted earlier this year to send $973 million the system’s way.
As we reported last week, Republicans in Michigan are pushing through a set of bills that would close off the pension system to new teachers in an effort to solve the state’s $26.7 billion in unfunded pension liabilities. On Wednesday, the Senate appropriations committee in that state voted 9-8 to approve the bills, which would have new teachers enroll in 401(k)-style retirement plans instead of into the pension system. This came despite the objections from Republican Governor Rick Snyder. His administration has come out against the effort, arguing that the current hybrid plan, which combines elements of a 401(k)-style plan and a more traditional pension program, is working.
Kerrie Vanden Bosch of the Michigan Office of Retirement Services blasted Republicans’ efforts to convert all new teachers to 401(k)-style plans during testimony in front of the committee. She argued that it would “do nothing” to address the pension plan’s unfunded pension liabilities, reports The Detroit News. And while Senate Majority Leader Arlan Meekhof told reporters that he expected the bills to pass the full Senate on Wednesday, a floor vote on them was delayed.
Also in the news, Maryland Republican Governor Larry Hogan agreed to give school districts $20 million to help fund teacher pensions.