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Ludlow School Leaders Express Concern Over Proposed State Retirement Changes

Ludlow teachers will be given the opportunity to take time off to visit the state legislature if any special session of the General Assembly is called.
 
Superintendent Michael Borchers initiated a conversation about teacher retirement benefits and the controversial changes proposed for that system in Frankfort by Republican Governor Matt Bevin. At last week's board of education meeting, Borchers said the proposal would have significant impact on the Ludlow Independent School District.
 
"We appreciate the fact that the governor is addressing the pension issue, but we believe that a one-size-fits-all approach is not the answer," said Borchers. "We support the shared-responsibility plan that has been presented to the House and Senate leadership."
 
Regional data was collected on possible administrative retirements in Northern Kentucky, based on the proposed pension plan, and 38 percent of administrators in the region reported that they would more than likely retire if the the plan is enacted. Borchers expressed concern that with this large number of retirements, districts would be forced to look at neighboring districts to fill the vacancies.
 
The same could be true with teachers.
 
Some of the concerns Borchers says he has with Bevin's Keeping the Promise Plan is that it requires new teachers to enter into a defined contribution plan. That means 18 percent of their salary woulc go for retirement and retired health care before any other deductions. He gave an example of hiring a teacher at a salary of $40,000 a year from which $7,200 would go to the retirement/health care system before any other deductions.
 
Borchers said it will be more difficult to get people who want to teach when their starting salary will be so low.
 
The plan would also require a 3 percent contribution over that from all employees for health care.
 
Teachers may seek to retire because the defined benefit plans stop after 27 years of employment.
 
Borchers said that Ludlow has some teachers who want to work past year 27, but the plan discourages the desire to keep working. This could very well lead to a shortage of new and existing employees within the education pipeline, he said.
 
With this in mind, Borchers said the governor has not ruled out a special session of the legislature, so if that happens he knows a lot of the teachers in the school would like to go down to Frankfort to help the legislature know their feelings about the retirement solution.
 
Jason Steffen, principal of Mary A. Goetz elementary, said that the session has been put off several times, and he thinks it is because the governor does not have the votes to pass his plan, so it has gone back to the drawing board. Steffen cited a report that said the governor's plan would cost about $4.4 billion, and status quo will only cost about $1.3 billion, which makes a serious difference.
 
"Northern Kentucky is so unique," said Borchers. "Our system works in a different way from the rest of the state."
 
The board agreed to officially give the teachers a day off to attend a special session of the legislature if it happens. Word will go out to parents letting them know what is going on.
 
"I know it will mean a lot to the teachers," said Borchers. "This whole thing will have a lasting effect on all of us."
 
Other notes:
 
In other business, George Sparks, of Barnes and Dennig, gave a report on the annual audit conducted on June 30. Sparks said it was an unmodified, clean report and the firm had excellent cooperation. However, the amount that the state has told the district they owe to help remedy the retirement plan went from $1,588,116 last year to $1,666,354 this year, and that has skewed some of the graphs that were shown about assets and liabilities.
 
Sparks said that the next piece of the plan from the state is coming, in the form of the GASB numbers, and no one knows exactly how that will play out yet.
 
The board voted to accept the audit report.
 
Written by Patricia A. Scheyer, RCN contributor