Rep. Michael Lee Meredith Releases Statement Regarding His Vote On Pension Bill

Representative Michael Lee Meredith (R), Oakland, has released a statement in reference to the recent pension reform, SB 151, according to both his Twitter and Facebook pages.

Scroll down to read the statement in it's entirety:

Many of you have asked for an explanation with regard to my vote on pension reform. Twitters limited words don't allow a thorough explanation so please follow the link.https://t.co/yRDwmkr8FH

— Michael Meredith (@Kyrepmeredith) March 31, 2018

​Over the last day and a half I've had many questions asked about the pension bill that passed the House early Thursday evening. I've answered several but thought it might be easier to address the issue here. I am not defending the process. I know many of you don't like the process and you certainly don't like the bill that was chosen as a vehicle. However, as a rank and file member, I don't get to make those decisions. The bill was 291 pages in total, but only a fraction of those pages were changes to current statute. The changes in the bill were underlined in bold print or were stricken through to be easily read. The text of the bill is also very similar to SB 1 which everyone has had weeks to study, but the effects of the bill are extremely different because of what was deleted from SB 1 in this reform package.

SB 151 as passed has ZERO changes for retired teachers. COLAs are maintained at 1.5% for current retirees and teachers who are currently working. This by itself is a huge change from SB 1 which I have heard from many of you would have cut your average retirement benefits by upwards of $60,000 over your lifetime. We listened and we fixed it. The bill also maintains the enhanced retirement package that gives teachers a 3.0 benefit factor and a high 3 year calculation if they work 30 years and are at least 55 when they retire. SB 1 only allowed teachers with 20 years or more of service to maintain this benefit. Under SB 151 as passed by the House, every current teacher gets this benefit. I heard from many of you with 18 or 19 years of service that felt like limiting this to those with over 20 years was unfair. We listened and we fixed it. For current teachers there is now a cap on sick days for retirement purposes only. The number of sick days accumulated at the end of this school year can be used to enhance your retirement, any days accumulated after this school year would still be paid out in cash upon your retirement, but would not be eligible for retirement enhancement. This provision was included in HB 539, the shared responsibility plan, that KEA endorsed and for which many of you had called or messaged to share your support. The bill does create a new tier of benefits for new hires, but those benefits continue flowing into the current KTRS system to be managed and invested to stabilize KTRS for the future. It provides a combined contribution of 17% of payroll with a guarantee to new teachers that the investments made on their behalf can't lose money even in an economic recession.

Retirees of the state and county employee systems will see no changes to their benefits. Current employees within 5 years of retirement will still get to use accumulated sick time to retire early, however if you are more than 5 years from retirement you would have to reach your years of service and your accumulated sick time will be added to your years of service to provide a larger retirement benefit. For state and county employees hired in 2014 and after, the 4% investment guarantee will be reduced to 0% but they will also get to keep 85% of any investment gains instead of the 75% of gains they currently get.

There was some concern about the repeal of a $5,000 death benefit for state employees. This does not affect anyone retired or even hired in any system before 2014. Those hired after 2014 receive a $20,000 life insurance policy that more than offsets this change. Also, the $80,000 line of duty death benefit remains for emergency workers. Current teachers and retired teachers receive their death benefit regardless of their hire date.
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Also, there has been a concern that allowing a phase in period to payoff the unfunded liabilities increases the cost and time to pay them off. However, that analysis only looks at KRS and doesn't look at the systems globally to include KTRS. It also doesn't take into account that with the increased contribution levels that are necessary to reach full funding, many of our city and county governments as well as quasi-governmental agencies like health departments, mental health centers, rape crisis centers, etc. did not have the ability to pay those increased contribution rates in their budgets.
Finally, I knew this vote would not be popular or particularly well received even with the major concessions that were made. Frankly, a NO vote would have been much easier to explain and would have been more popular politically. With a no I could have come home and people would have shook my hand, thanked me and told me how much they appreciated what I did, but I would have known that what I did was wrong. Depending on the retirement system you are in, the state has between 15 cents and 60 cents of every dollar YOU have earned to pay your benefits. Many of the same people that underfunded those pensions over the last 20 years are the people telling you now that they are with you, that they support you and are many of the ones that took the easy no vote so people would applaud them and re-elect them. I took the hard vote because I want to be sure that your retirement is secure. The House has budgeted $3.3 billion dollars which is 15% of our total budget to fully fund all retirement systems for the next 2 years and this bill requires funding the ARC in the future for all systems. To do that and to restore education funding required us to raise around $500 Million in revenue, another tough vote, but I took that one too. I will continue taking the tough votes for the right reasons while listening to you and using the best information that I have. I hope everyone has a Happy Easter and enjoys the time with family and friends.