In Kentucky the state union has presided over the greatest slide in assets in a teacher pension in American history.

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By Dr. Randy Wieck holds degrees from Amherst College, The London School of Economics, and a Ph.D. in American Studies from the University of Paris, III, The Sorbonne. He has taught for 26 years, is currently a teacher at Manual High School, and is the author of Ignorance Abroad (Praeger).

Today, in 2018, 140,000 Kentucky public school teachers are wondering: what happened to our pension?

According to the National Rating Agency (Moody’s), at a 32% funded level, the Kentucky Teacher Retirement System (TRS) is the worst-funded teacher pension in the country.

The current leaders of the Jefferson County Teachers Association (JCTA), the Kentucky Education Association (KEA), and the TRS – some in office since 2003 – have presided over the greatest slide in assets in a teacher pension in American history. The funded level of the teacher pension has fallen from an 86% funded level in 2003 to 32% today, with liabilities of around 30 billion dollars. Many financial experts now consider the TRS to be in a death spiral. What happened to our watchdogs? Weren’t the JCTA, KEA, and TRS supposed to watch over this key benefit and to protect it from harm?

Teachers are busy people; they rely on their watchdogs to keep watch. Few people know that teachers are not recipients of Social Security, as the teacher pension was originally intended to provide for teacher retirement. Now, it is anyone’s guess where the funds will come from to repair the financial damage that has been done to this retirement system.

Moreover, in recent years, the teacher pension system has been pouring funds into highly-secret, high-risk, high-fee alternative and private equity investments – an attempt to “big-bet” TRS back to solvency. We all know what happens to gamblers who play with scared money. When teachers demanded to know how their contributions were being invested, and filed a transparency lawsuit seeking this information in 2014, they were opposed by TRS management. In a surprising February 2016 action newsletter from JCTA, transparency was blocked by the teachers’ own union.

Additionally, the teacher watchdog association has resisted taking any effective measures (legal action, civil disobedience, or peaceful protests around the capitol) that might call the legislature’s hand and stop the signing of secret contracts, and the repeated underfunding of the pension that began in the early 2000s.

The financial damage done to this pension is an impairment of a contract, something specifically prohibited by the United States, and the Kentucky Constitution. Presumably, with transparency, details of financial transactions might become known that were never intended to see the light of day. Perhaps this explains the resistance to transparency. Strange as it may appear, there has been barely a peep of protest from the leaders of these three organizations.

Worried teachers were even told by JCTA legal counsel – that if they were so concerned about their retirement – to go form their own organization. This resulted in the founding of Teacher Retirement Legal Fund (TRELF, 501.c.3) in 2014. We, of TRELF, have been fighting a pitched battle, against powerful forces, to save our retirement – a retirement plan that we began paying into the day we started working as public school teachers.

We had no choice; it was a contractual requirement.

Finally, it now appears, from his address on January 16, 2018, that Governor Bevin is trying to cut his way to solvency by slashing 70 programs; to pit retirees against the rest of the state by eliminating these 70 programs (are they all without merit?); to shove the massive debt back to school districts, which he claims are sitting on some $960 million in “reserve” funds; and – perhaps he is correct here – trim the number of administrators in Jefferson County who earn over $100k per year (but even that amounts to only $60 million savings versus a $30 billion liability); and, to top it all off, to kill, once and for all, the defined benefit system through the 401K trojan horse plan.

Additionally, the debt figure Governor Bevin cited in his address was drawn up under outdated accounting standards no longer recognized by actuarial consensus: that TRS is funded at 56%; that teacher salary growth for legislative funding purposes will be 4%; and that the rate-of-return on investments will be 7.5% (more accurate standards, recognized by national ratings agencies, are known as GASB 67 and 68). These misleading figures were determined by the well-known economist, Rosie Scenario.

And so, teachers, who happen to be busy with teaching the future, are wondering the following: what happened to our watchdogs? What will we live on when we are too old to work in the classroom? The concerned teachers of TRELF will continue to wage a legal battle to secure the rescue of our earned retirement.

For more information, visit TRELF on Facebook; or visit http://www.kentuckyteacherretirement.weebly.com or follow us on Twitter @teachlegalfund

5 thoughts on “In Kentucky the state union has presided over the greatest slide in assets in a teacher pension in American history.

  1. I have warned this may be the biggest wall street fraud ever. I cant find the 4 trillion worth of US companies that private funds tell the SEC they own . I find at most half that in the tax stats. They would have to be organized in one of 2 ways as c corps or partnerships and would show up in the higher revenue and asset catagories and there is no room for them. Wall Street has long considered the state pension funds as unsophisticated investors.

  2. Should the investment information you are seeking be pulled by an attorney from the Freedom Of Information act?

  3. A stare government is exercising undue harm on US citizens by cloaking investment processes and the truth in who is investing and acquiring inexorbent fees plus mismanaging our hard earned contributions. To me this is extortion on a systemic high level proportion because of the lack of transparency and due to the stifling of and coverup of said thieves.

  4. A state government is exercising undue harm on US citizens by cloaking investment processes and the truth in who is investing and acquiring inexorbent fees plus mismanaging our hard earned contributions. To me this is extortion on a systemic high level proportion because of the lack of transparency and due to the stifling o teacher watchdogs and coverup by unions of said marauders.

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