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Kentucky Teachers Blast Pension Reform Plan; Warn That 401(k) Plans Will “Dismantle Public Education”

Kentucky Teachers Blast Pension Reform Plan; Warn That 401(k) Plans Will “Dismantle Public Education”

Graves County Superintendent Kim Dublin in Kentucky is apparently concerned that forcing her teachers to accept the same retirement plans offered to almost every private sector employee in the country would literally “dismantle public education” as we know it.

Speaking to a local NBC affiliate in Kentucky, Dublin told reporters that she relies on the excessive generosity of Kentucky taxpayers to underwrite her state’s lavish defined benefit plans that she uses as a recruiting tool to attract the ‘best talent’.

A local school leader says she believes proposed changes to Kentucky’s pension system would dismantle public education.

 

Any day now, Kentucky Republican Gov. Matt Bevin could call for a special session for a vote on pension reform.

 

Some changes include putting new teachers — or teachers who have fewer than five years of experience — onto a 401k style system. Teachers with more than five years in the classroom will still be able to retire with a full pension after 27 years.

 

That would limit how long they could continue paying into a pension after reaching that number of years. The current proposal allows for three additional years.

 

Graves County Superintendent Kim Dublin is concerned by many aspects of the proposal.

 

She says the current pension system allows her to recruit and retain qualified teachers. “Our success is because of people, not programs,” she says.

Teacher

Of course, a couple of things seem to be lost on Ms. Dublin.  First, she has no idea whether or not she’s managed to attract the best “talent” to her schools because her teacher union would never allow her track performance metrics and subsequently use those metrics to make hiring/firing decisions.  After all, treating public employees the same way their private sector counterparts are treated just can’t be allowed.

Second, Ms. Dublin seems to not understand that failure to enact pension reform in the state of Kentucky will almost certainly result in her pension ponzi going bust in the not so distant future, thus leaving her teachers with a fraction of the retirement benefits they expected.

As we’ve pointed out frequently of late, Kentucky’s public pensions face a daunting funding hole of $33-$84 billion, depending on your discount rate assumptions, according to a recent analysis conducted by PFM Group.

Kentucky

 

Meanwhile, the aggregate underfunded liability of pensions in states like Kentucky have become so incredibly large that massive increases in annual contributions, courtesy of taxpayers, can’t possibly offset liability growth and annual payouts…which means it’s trapped in an inevitable downward spiral that will only end when the ponzi runs out of cash.  All the while, the funding for these ever increasing annual contributions comes out of budgets for things like public schools even though the incremental funding has no shot of fixing a system that is hopelessly “too big to bail.”

KY

Of course, maybe “dismantling public education” isn’t such a bad idea…there are hundreds of privately-funded schools sprinkled around the country that somehow manage to provide a far superior education at a fraction of the cost per pupil that public schools demand…

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