The general public and every business leader needs to understand one aspect of the pension crisis relating to sick and vacation time. State employees accrue 12 vacation days, 12 sick days and @10 holidays every year. That is 34 paid days a year, or divide by 5 days a week, that is over 6 weeks off each year with pay or 1 month and 2 weeks off with pay.
Employees can use vacation and sick days as needed or save them. They NEVER loose them.
If an employee works in a position that requires replacement for an absence, such as a teacher, police officer, corrections officer, etc. then the state the employee who is off, in addition to paying a replacement, generally at an overtime rate. The position/post cannot go vacant.
Teachers get additional days off when school is not in session and of course, the summer months. They accrue 3 personal days, 10 sick and 10 vacation days for a total of 23 paid days per school year or 9 months of employment. So, they could actually work less than 8 months of the school year if they choose to use their accrued benefits.
Employees are allowed to save as many days as they choose as long as they are employed with the state, with the exception of personal days which must be used during the school year.
At retirement, the state must pay the employee for all of the vacation time accrued at their current rate of pay. All sick time can be diverted to time worked. So, if an employee saved all of their sick time for 30 years, they would have 360 days or 72 months of sick time which calculates to 6 years of time to be credited to their time served. That time is then added to their retirement and the checks begin.
So, with just these calculations, is it any wonder the Kentucky Retirement is in crisis? What private sector business can afford these benefits?
Gov. Matt Bevin promised, and he has honored his promise, that no current employee or retired employee would have anything changed. What they were promised when hired in, the Commonwealth will provide. However, he wanted to make changes for new employees as this system is failing to sustain its debt.
Another amazing benefit for current employees is the “High 3”. This means an employee can work at any job for their tenure, but when time for retirement, it is based on the highest salary paid for the top 3 years. For example, if a teacher makes $50,000 for 27 years, then transfers to an administrative job for 3 years making $100,000, the retirement is based on the salary of $100,000, not the amount they have actually paid into the system for 27 years. Another example would be an employee working all of the overtime they can possibly get to increase their salary. Here in Glasgow, we have watched as police officers revert to lower paying jobs just to finish their time, because once obtained, it’s set.
This is just a couple of issues. There are many more including how much has been paid in, how much invested, how much as been lost, how much has been borrowed by previous governors and never repaid, the increase in health care cost, etc. Kentucky has 136,000 people actively contributing to the Kentucky Retirement System and the 72,000 to the Teacher’s Retirement. Collectively (current and retired), we have around 500,000 in the system.
Gov. Bevin has not, in any way adversely affected any of our retirees. He is a business man that has looked at the debt and realized we are in a crisis and we must make changes. His frustration has shown a time or two, probably because he is used to running businesses and fixing problems, not playing politics. Governor Bevin’s Father was a teacher as are several family members. This is not a personal attack on our teachers or any state employee, past or present. He is the only Governor in recent history to fully fund the teacher’s pension.
We need to solve this problem together, not protest against each other. We need folks to come to the table with suggestions for resolutions. We need to ignore the lies of the unions and the scare tactics. This is pretty simple math with the arrows pointing down.