New teachers’ pension policy championed by BIPPS takes effect

A new teachers’ pension policy championed by the Bluegrass Institute has taken effect.

Public school teachers hired on or after Jan. 1 will be placed a new pension tier projected to save taxpayers billions of dollars in coming decades while still providing generous retirement benefits to those who spend their careers teaching in Kentucky classrooms.

House Bill 258, shepherded through the 2021 session of the Kentucky General Assembly by Rep. Ed Massey, R-Hebron, reflects BIPPS’ new pension paradigm of offering defined benefits to the newest members of the Kentucky Teachers’ Retirement System (TRS) while shifting the risk of future downturns from taxpayers to beneficiaries with a defined-contribution element.

The new policy encourages teachers to stay on the job longer by raising the age at which they can retire and collect their full pension benefits. New teachers entering the system this year will receive full benefits if they are at least age 57 with at least 30 years of service, age 60 with at least a decade in the classroom or age 65 with at least five years on the job.

Also, new TRS members will be prohibited from certain maneuverings to spike pension benefits during their final years on the job and from “double dipping” in which members collect multiple government pensions.