Ding…Ding…Ding. Round Two!
And so continues the battle on Kentucky Pension Reform. Late on Tuesday evening Senate Bill 1 was officially filed, proposing new changes to the state pension system.
To be completely honest, I am still sifting through the 269-page bill (ugh!) to make sure I fully understand the proposed changes. But…here’s what I’ve gathered so far:
- If I’m a teacher with 20+ years, I’m feeling slightly better about the changes to my retirement benefits, but if I plan to retire before turning 65, I’m very concerned about the lack of funding for retiree health insurance in the current budget.
- If I’m a teacher with less than 20 years, I’m not sure how I feel. I don’t know that I feel better about the changes, but I don’t know that I feel worse either. It feels like there was some slight-of-hand involved with the changes simply being repackaged, but delivered with the same results.
- If I’m a future teacher, I’m not happy. To put it simply, it’s like telling someone you don’t like squash…so they hand you a zucchini. They may be different colors, but they’re still going to taste the same on the way down.
- If I’m in charge of finances of the school district, I’m a little uneasy. What’s the old saying about “something” always flowing downstream? The state just shifted their revenue problems down the line to local gov’t and school districts.
- And for all Kentucky residents, prepare for conversations about increases in local property taxes to begin in the near future, as school districts try to find ways to deal with their increased financial responsibility.
Overall, this round of changes feels like a compromise. Slap a band-aid onto the bleeding budget and hope it buys enough time for the problem to fix itself in the future.
With that said, here are the stories that caught my eye this week:
MONEY: Do You Really Need Long-Term Care Insurance? (Forbes)
Woof! This is a tough one to answer, but I’ve increasingly found myself having to help people navigate their options. The probability of a long-term care event occurring is steadily increasing. For a person who reaches the age of 65, there’s a 70% chance that long-term care will be needed in some form. At the same time, many insurance companies are either exiting the long-term care insurance market or increasing their premiums to account for increased probability of claims. To sum up the article, the prime time, from an affordability standpoint, to consider LTC insurance is your mid to late 50’s, and as always, it’s important to research options that fit your specific needs.
LIFE: How freeskier Elizabeth Swaney made it to the Olympics with a very simple halfpipe run (NBC Olympics)
Well played! In my opinion, Elizabeth Swaney deserves a round of applause. She fulfilled her dream of being an Olympian by using her brain instead of her athletic ability. She’s the Women’s Half-Pipe skier who skied the half-pipe intent on doing zero tricks, focused on not crashing, and content with finishing dead last. So how did she get to the Olympics? She studied the system and qualifying standards…and then she played them like a fiddle. Despite being a US citizen, Ms. Swaney entered the Olympics under her grandparents’ native country of Hungary, chose a newer sport with a low number of competitors, traveled the world to attend carefully selected qualifying events in order to meet minimum Olympic requirements, and then hoped for the tiniest bit of good luck for herself by having someone else drop out…and she got it. She studied the rules, she followed the rules, she put in the time, she will forever be an Olympian.
KENTUCKY PENSIONS: 7 things Kentucky teachers need to know about the Republican pension bill (Herald-Leader)
The new bill scaled back quite a bit from the original plan released last fall. Here are the highlights: for current teachers to receive “enhanced” retirement benefits, teachers who currently have less than 20 years of service will have to to have work for 35+ years and be 60 years of age; cost-of-living adjustments on retirement benefits will likely be cut in half for up to 12 years (dependent upon the health of the pension plan) ; there will be a cap on unused sick days put towards retirement (as of 7/1/18); new teachers (as of 1/1/19) will be placed in new retirement plan that is a hybrid between a 401(k) and a traditional pension; new teachers will not have an inviolable contract, meaning that their benefits can be changed at any time by lawmakers.
KENTUCKY TEACHERS’ PROPOSED PENSION CALCULATOR: The calculator is currently being updated to reflect the newest pension changes. I have restricted access to the calculator until the update is complete, which will hopefully be finished by the end of next week. If you are curious about how the new changes will affect you, check back in periodically for the completed update.