Bluegrass Beacon: Pledge calls for full pension transparency

Editor’s note: The Bluegrass Beacon is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute’s website after being released to and published by newspapers statewide.

A consistent charge leveled against reformers who want to adjust the benefit structure of the commonwealth’s Teachers’ Retirement System (TRS) is that we overstate the generosity of those benefits.

The fact is, no one really knows for sure what each TRS members or retiree gets since the Kentucky General Assembly enacted KRS 61.661 in 1972 during the late Gov. Wendell Ford’s administration throwing a cloak of secrecy over individuals’ benefits.

“Each current, former, or retired member’s account shall be administered in a confidential manner and specific data regarding a current, former, or retired member shall not be released for publication unless authorized by the member,” the statute says.

The only logical reason for making transparency illegal – as that law does – was to hide information teacher-union bosses know wouldn’t digest well with hardworking private-sector taxpayers should it be made subject to the Open Records Act.

However, spending increases on public pensions, which consume $3.3 billion – or 15 percent – of this year’s General Fund budget, combined with accompanying arbitrary and sloppy tax increases designed to fund those hikes, likely will cause such heartburn that will not be cured without a prescription which includes shining the light on individuals’ retirement benefits.

After all, where’s the fairness in asking taxpayers to pony up hundreds of millions of additional dollars for one of the nation’s most severe pension predicaments but still deny them the information needed to determine the true level of benefits?

Lumping all benefits together in one pot, stirring them up and offering an “average benefit” of $36,244 – as the TRS claims – offers little pertinent information since that average includes teachers in the system for 30 years versus those who became members five years before retiring or leaving for another job.

The cynical side concludes such an approach offers a way to hide the true generosity of benefits.

Whereas the happy warriors just want to make sure members’ privacy and information that could be used to comprise their personal identity remains protected.

The answer is to make only the appropriate information available needed to separate the level of benefits expected by career teachers and administrators and received by those already retired from those who spent or will spend only a few years in the system.

All candidates for state House and Senate seats, including incumbents and their challengers, recently received an 84-word pledge from the Bluegrass Institute that by signing, commits them to support legislation making the entire public-pension system “fully transparent.”

The information delineated in the pledge is limited to what Kentucky taxpayers, not identity thieves, have a right to know, “including requiring the disclosure of names, status and projected actual retirement benefits and benefit payments from the Kentucky Employees Retirement System, Teachers’ Retirement System, State Police Retirement System, County Employees Retirement System and Judicial Retirement Plan.”

The institute will be revealing pledge-signers’ names before the Nov. 6 election, thus allowing voters a glimpse into whether their political representatives actually believe in allowing the kind of transparency that makes government work better for – and be accountable to – its constituents, or whether “transparency” and “accountability” are little more than political buzz words.

A previous pledge signed by an overwhelming majority of the candidates in the 2016 election helped result in opening the blinds on the commonwealth’s corrupt legislative pension cauldron.

Making information regarding state retirement-system members subject to open records requests will offer needed data on the generosity of benefits and more relevant ideas for reform.

Defenders of the status quo complaining about the overstatement of benefits by reformers should be the biggest supporters of this pledge.

After all, seeing the benefits for each individual in the system would offer indisputable evidence backing their claims.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com and on Twitter @bipps.