Other statewide teacher’s groups expected to join in
Jefferson County teachers who are fed up with the state government’s failure to properly fund their pensions plan to sue Gov. Matt Bevin and two other high-ranking officials over the financial quagmire.
Attorney Theodore Lavit is representing the case’s 30 plaintiffs, some of whom are retired teachers while others still work at public schools in Jefferson County. They hope the lawsuit will lead to a ruling that requires the state to fulfill its fiscal obligations to the Kentucky Teachers’ Retirement System, which has been inadequately funded for years, Lavit said.
Senate President Robert Stivers, a Manchester Republican, and outgoing House Speaker Greg Stumbo, a Prestonsburg Democrat, are listed alongside Bevin as defendants in the impending lawsuit, which was announced Tuesday in Louisville.
Teachers are contributing over 12 percent of their paychecks to KTRS, Lavit said. But the state government hasn’t held up its end of the deal, violating the U.S. and Kentucky constitutions in the process.
“They have breached their contract,” he said of state lawmakers. “They just utterly failed …”
Previous governors and legislators haven’t taken responsibility for the pension system’s growing financial problems, Lavit said. “Not only (have they) avoided taking the blame, but they’ve sidestepped the need and the crisis has grown right under their feet,” he said.
The plaintiffs, who have received support from a nonprofit called the Teacher Retirement Legal Fund, hope a judge will allow them to represent over 146,000 people who are covered by KTRS, he said.
KTRS has $17.5 billion in assets, but its unfunded liabilities total about $14.5 billion, said Beau Barnes, the pension system’s general counsel. The state government recently pledged $973 million to KTRS, which will receive the money in quarterly installments.
The pension system has sold some stocks and other assets since 2008 to help cover the benefits owed to retired teachers, Barnes said. This new influx of cash should help it make new investments. “That’s a game-changer for us,” he said.
But Lavit said the $973 million “wasn’t meaningful in terms of reducing the deficit.”
Bevin spokeswoman Amanda Stamper said in an emailed statement that the “historic budget” the governor signed this year reflected his ongoing commitment to fixing Kentucky’s pension problems.
“Reforming the state’s ailing pension systems, both for teachers and state workers, has been the top priority of Gov. Bevin’s administration since day one,” Stamper said.
Stumbo’s office declined to comment, and Stivers’s office did not immediately respond to an interview request Tuesday afternoon.
By Morgan Watkins