Ky Retired Teachers Health Insurance - $52.4 million in subsidies for retired teachers under 65 has been cut from the state budget. Getty Images
The state's nearly $12 billion budget plan excluded her $52.4 million pledged in state grants to help pay the retired teacher's health insurance.
Ky Retired Teachers Health Insurance
Health insurance costs for her approximately 10,000 retired teachers under the age of 65 as of July 1, 2010 are covered by government subsidies.
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This grant is part of a 2010 arrangement between the state, teachers, and school districts, all agreeing to make certain financial contributions to support the TRS Health Insurance Foundation. Since then, the Health Insurance Trust has recovered to hold her $1.6 billion in assets. This is her 61% funding level.
Despite the state's 2010 pledge, a budget report from the Republican-led Congressional Committee on Freedom Congress told TRS that in fiscal year 2022, which begins on July 1, the I am told there is no subsidy.
Instead, TRS was instructed to cover the costs by taking her $52.4 million from the Health Insurance Trust.
In the same her yearly budget, lawmakers are proposing to deposit her more than $608 million in the state's "Rainy Days" Budget Reserve Fund, bringing her to $1.2 billion in total.
Teachers' Retirement Insurance Program (trip)
It's the same risky move to skip agreed-upon state contributions and spend elsewhere, causing the collapse of teacher and state employee pension funds, said the executive director of the Retired Teachers Association. said Tim Abrams.
"There are concerns that this could put the TRS Health Insurance Fund on a negative trajectory after years of growth," Abrams said. But the state began to withdraw its obligation to pay and said, 'This is well funded, so we can spend some of this money elsewhere. will struggle to regain the
Democratic Gov. Andy Beshear's state budget proposal, which he submitted in January, included about $70 million in state aid, said Bo He Burns, a TRS general counsel. Barnes said officials told lawmakers that $52.4 million would be enough.
The chairs of the House and Senate Budget Committees did not immediately respond when asked for comment on Monday.
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John Cheves is the Government Accountability Correspondent for the Lexington Herald Reader. He joined the paper in 1997 and previously worked for the Washington and Frankfort bureaus, covering legal battles. Support my work with a digital subscription
Battleground Pennsylvania is the stage for Saturday's presidential showdown as each party's biggest stars work to energize voters just days before the midterm ballots close.Kentucky has been retired for decades. It has funded teacher health benefits. But for the first time this year, this payment was dependent on the budget surplus. The move to cut health insurance funding from the state's biennial budget and instead only pay for it when the state receives a windfall is seen as a necessity by lawmakers and a risky move by benefit-dependent retirees. It is explained as
“In our view, this was not the ideal funding method.
The funding was announced earlier this month when Gov. Matt Bevin and state legislators touted the good news of a nearly $200 million state surplus. About half of that goes to weakened pension funds for most civil servants. About $70 million of the surplus will be used to pay health benefits for retired teachers who are under 65 and eligible for Medicare.
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"It worked in the end, but it should really be in the budget," McKim said, adding that the JCTA appreciates state efforts to fund teacher pensions.
"Past budget cycles have been particularly tight as we had to fund pensions that hadn't been done in over a decade," said Louisville Republican Rep. Jason Nemeth, who serves on the House Budget Committee. said. "There's a lot of debt out there."
About $43 billion in debt. Kentucky owes every state employee expected to retire without savings in the next 30 years.
This shortfall is the result of several factors, notably low returns on investment during the recession and the state's failure (until recently) to make contributions to help future retirees. To this budget that has created victims.
Teachers Retirement System Of The State Of Kentucky
"We're putting $1 billion into the pension system," Nemes said. "And with a budget of about $11 billion, when he spends $1 billion on pensions, he loses the ability to pay for other things."
The lawmaker made cuts that included her $70 million funding for a medical plan for retired teachers under 65. It's a program that nearly 10,000 retired Kentucky teachers, including former JCPS teacher Lois Whitman, rely on.
Whitman was a special education teacher and librarian in Jefferson County where he taught for 27 years. She retired when she was 58 to take care of her parents, who were her retired teachers.
Her mother has dementia and both her parents have physical problems. Whitman says she helps them three to four days a week.
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"When I'm teaching, I work 24/7, so there was no way I could keep working full-time," he says.
Whitman made her calculations before she retired. She met with her financial advisor, and she determined that she could afford to retire, considering her spending, which included $200 a month in investments, pensions, and health insurance. But now he seems more uncertain about the future of profits.
"When we retire, we were counting on that. That's our expectation. That's what we've been promising all along," Whitman said.
Here are her two health plans for retired teachers. One, her comprehensive health plan for retirees under 65, currently serves about 10,000 retirees and costs the state about $5.5 million a month. The second plan is a supplemental plan for her 65+ retirees who are eligible for Medicare. There are about 31,000 pensioners, which in total cost him $8 million per month.
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From 1998 until about 2005, her 65+ plan didn't have enough money to pay for health insurance for retired teachers. To solve this, the state raised money from the also underfunded teachers' pension fund to cover the difference. The state later paid back the bond to the pension fund, according to Beau Burns of the Kentucky Teachers' Retirement System.
To prevent that from happening again, teachers' unions and Congress negotiated a bill in 2010 called the Shared Responsibility Act. It said all teachers would be paid 3% more than their salary and school districts would be paid accordingly to increase the health insurance fund for retired teachers. and the teacher and the school will fund the plan for themselves over the age of 65.
However, there is a provision in the law that the General Assembly can suspend state payments to this fund "if the federal welfare deems it necessary."
For the first time in history, legislators have argued that this year's health insurance budget would be better spent on pensions, income tax cuts and tight budgetary needs.
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Gov. Matt Bevin did not include the fund in any year of the biennial budget. The house wanted to fund both years. Ultimately, the final state budget guarantees retirement teacher health plan funding only for the first year (2018) and ensures that the funding is tied to surplus the following year (2019). did.
Rep. Nemeth, who initially voted to fully fund the plan, said it was a difficult decision for Congress to ultimately not fund. But he said other programs need the money too.
"$70 million, that's a lot of money," Nemes said. “This is something we have been struggling with because it was very important to us to fund education, fund teachers, fund their pensions and maintain their health care. It's a problem."
The state has raised both sales and tobacco taxes this year, and the economy is doing well, so the surplus wasn't shocking...but what if it wasn't for him?
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The trustees of her KTRS pension board, which administers pensions and health insurance for retired teachers, assured lawmakers that if there were no surpluses, she would be able to cover her medical bills before she turned 65. The Board may withdraw funds from its fund created by the Joint Responsibility Act which is supposed to provide medical care to retirees
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