By executive order, Gov. Steve Beshear has created a 23-member work group to develop recommendations to strengthen the solvency of the Kentucky Teachers’ Retirement System.
The group is made up of policy and education leaders, according to a press release from the governor’s office, and is charged with developing recommendations to resolve a funding shortfall and stabilize and secure funding for the system that serves more than 75,000 active members and more than 45,000 retired members. David Karem, a former state senator and former chairman of the Kentucky Board of Education, will lead the group.
The work group will review best practices in other states regarding pension benefits, conduct a comprehensive review of funding options and make recommendations for improving the fiscal solvency of the KTRS. The work group may also contract for consulting services. Beshear asked for a report on or before Dec. 1, 2015.
According to the system’s 2014 actuarial valuation, there is a $14 billion unfunded liability and a 53.6 percent funding status. This is compared with the system’s $571 million unfunded liability and 95.7 percent funding status in 2000.
Beshear, in the press release, said he recognizes that other study groups have examined the KTRS in recent years, but “since the issuance of the reports by these study groups, a number of changes and improvements have been made by the KTRS. We can utilize this prior work in this effort. It is critical that we explore the options and develop recommendations to aid the 2016 General Assembly as action needs to be taken next spring to address this crisis.”
Although Beshear’s actions garnered praise from Senate President Robert Stivers, (R-Manchester) and House Speaker Greg Stumbo, (D-Prestonsburg), Rep. Jeff Hoover, the House Republican floor leader, released a statement saying he is “extremely disappointed.”
“Gov. Beshear had a real opportunity to create an independent, nonpartisan panel to give a thorough review of KTRS in an effort to make substantive recommendations to solidify the system,” said Hoover, (R-Jamestown). “Instead the governor chose to fill this task force with self-serving special interest groups that have been part of the problem, not part of the solution.”
“I once again call for an independent panel with the foremost experts in areas like investments and actuarial audits to be appointed so we can deliver on our promise to teachers that they will have a stable retirement system for years to come,” Hoover added.
Members of the working group include:
· David Karem, former state senator and former chair of the Kentucky Board of Education
· David Adkisson, CEO of the Kentucky Chamber of Commerce
· Mike Armstrong, executive director of the Kentucky School Boards Association
· Jason Bailey, research and policy director for the Mountain Association for Community Economic Development
· Mary Ann Blankenship, executive director of the Kentucky Education Association
· Jane Driskell, state budget director
· Adam Edelen, state auditor, who shall serve as a nonvoting member
· Amanda Ellis, associate commissioner, Office of Next Generation Learners in the Kentucky Department of Education
· Lori Flanery, secretary of the Finance and Administration Cabinet
· Gary Harbin, executive secretary of the Kentucky Teachers’ Retirement System
· Todd Hollenbach, state treasurer who is also a board member of Kentucky Teachers’ Retirement System
· Mary Lassiter, secretary of the Governor’s Executive Cabinet
· Timothy Longmeyer, secretary of the Personnel Cabinet
· Roger Marcum, chairman of the Kentucky Board of Education
· Brent McKim, Jefferson County Teachers’ Association president
· Brigitte Blom Ramsey, executive director of the Prichard Committee for Academic Excellence
· Tom Shelton, executive director of the Kentucky Association of School Superintendents
· Bob Wagoner, executive director of the Kentucky Retired Teachers Association
· Wayne Young, executive director of the Kentucky Association of School Administrators
· Two members of the Kentucky State Senate designated by the president of the Senate
· Two members of the Kentucky House of Representatives designated by the speaker of the House