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A QUARTERLY PUBLICATION Kentucky Retired Teachers Association Serving Retired Teachers Since 1957 VOLUME XLVII, NUMBER 2 LOUISVILLE, KENTUCKY DECEMBER 2012 Kentucky Teachers’ Retirement System INTRODUCTION Kentucky Teachers’ Retirement System staff members traveled with the Fall Workshop team and presented in each district. Workshop attendees received the latest news concerning their retirement system, insurance and legislative issues. Jane Gilbert was on hand to explain the state of the insurance fund while Elaine Rall, Debi Newman, and Becky Niece updated issues with KTRS investment performance and governance. KTRS Executive Secretary Gary Harbin joined the team in Jeff erson County. Defi ned Benefi t Plan (instead of a defi ned contribution plan). Contributions from the active teacher plus the employer match lasts six years. Aft er that, the retiree’s annuity is paid from investments. Due to the outstanding investment practices of KTRS, retirees will draw their annuity for the remainder of their lives. Sixty of our members over 100 years old are still Gary Harbin, KTRS drawing annuities and that number increases each year. Executive Secretary Th e national atmosphere of pension plans is putting our Defi ned Benefi t Plan under attack. We can call it “Pension Envy.” While many folks have had their pension plans go awry, ours has not. Th erefore, we have become the envy of others. It has worked successfully for us for 70 years and with our positive fi nancial investment record, it should not be changed to a Defi ned Contribution plan. SYSTEM STATISTICS (presented by Elaine Rall, Debi Newman, or Becky Niece) Field of Membership. As of December 2011, there were 60,117 active educators, 14,433 of which were eligible to retire (27+ years). Th ere are presently 139,309 members of KTRS. Th at includes 75,786 Contributing Members; 17,981 Inactives; and 45,542 Retired, Benefi ciaries, and Survivors. During June and July of 2012, there were 1,405 new Continued on page 9 IN THIS ISSUE . Legislative . 9 KY , , Kentucky RX Coalition. 9 572 KTRS At Workshops 2012 . 1 STD PERSONALLY SPEAKING Humana Update . 10 POSTAGE Legislators Participating in Workshops . .11 . P A I A D P From the Executive Director . 2 S PRSRT . PERMIT Business Partners Participating in Workshops . .12 U KRTA: 2012 LOUISVILLE Social Security & Pension Watch District Presidents. 13 SPOTLIGHT ON A MESSAGE FROM THE PRESIDENT . 2 Leadership & Membership! Louise Peal Dodson. 14 KRTA PARTNERS Commonwealth Connection 2012-2013 . .14 Seniors Choice Group Retiree Health Plan . 3 Week to Honor Retired Teachers . 14 North American Life Look How We Celebrated . 15 AROUND THE STATE Benefi ts of LifeLock Identity Th eft . 3 Brown & Brown Insurance Th ird District RTA . 16 24/7 Medical Alert Systems . 4 Monroe County RTA . 16 Johnson County RTA . .16 PUBLICATION Humana Critical Illness Plan . .4 Liberty Mutual Pike County RTA. 16 Protection for a “Rainy Day”. 5 Marshall County RTA. 16 Owen County RTA . .16 QUARTERLY Bursting at the Seams: A Winter Checklist . 5 A Comfort Keepers Whitley Area RTA. 17 Five Tips to Keep Aging Relatives Merry . .5 Daviess Co/Owensboro RTA. 17 MISCELLANEOUS INFO National Health Administrators N.O. Kimbler Scholarship Fund Report . 17 Long Term Care Insurance . 6 Kentucky Retired Teachers Association Teachers Retired Kentucky FALL WORKSHOPS 2012 Kentucky Citizen Foster Care Review . 18 FOR YOUR INFORMATION Introduction: Leadership & Membership . 7 . 19 Shared Responsibility . .7 KRTA Membership Pin Order Form . .19 QUIPS, QUOTES & PUZZLES . Health, Insurance & Wellness . .7 19 DECEASED RETIRED TEACHERS . AARP . 8 20 Membership & Pre-Retirement. 8 Louisville, Kentucky 40291-3234 Kentucky Louisville, 7505 Bardstown Road Bardstown 7505 PAGE 2 KRTA NEWS DECEMBER 2012 PERSONALLY SPEAKING . Social Security News & Pension Watch How Social Security Penalties Hurt Public School Educators Educators are oft en hurt by what are called “public servant penalties” in Social Security—the Windfall Elimination Provision (WEP) and the Government Pension KRTA: 2012 Off set (GPO). Th is article’s focus is the GPO penalty. Background Bob Wagoner Our Commitment Originally, the Social Security system excluded state and local government employees As the executive director of KRTA, from coverage. Thus, the Kentucky Teachers’ Retirement System (KTRS) was Executive Director there are two things I enjoy most about established by the Kentucky General Assembly in 1938 to provide retirement benefi ts my work; the people and the projects. for Kentucky’s public school teachers. Many Kentucky Retired Teacher Association It is hard for me to believe I am now (KRTA) members, however, are eligible for Social Security benefi ts by being married starting my 11th year at KRTA, and it to a Social Security recipient. still feels like a new job! I suppose that GPO: The Rationale is because there are always new opportunities, challenges and people to meet. Th e GPO, which passed in 1977, was imposed to stop highly paid federal civil servants Th roughout our almost 55-year history, KRTA’s signature goal has stayed the same: from being able to double-dip into Social Security and other pensions. KRTA has as its sole purpose the improvement of the welfare of retired teachers in GPO: The Formula Kentucky and to oppose ill-conceived proposals that threaten their welfare. Th e GPO deprives retired educators of their spousal and survivor benefi ts under KRTA recognizes the importance of that commitment as much as—if not more Social Security. Typically, spouses of Social Security recipients receive half of the than—ever. As you know, there is a national movement to reform or destroy public amount of their partner’s benefi t even if they do not qualify for Social Security on pensions. Th ere is more pressure on public pensions as a result of the 2008 economic their own. Under the GPO, that amount is reduced by two-thirds of the amount of downturn from which we are still working our way out. As a result local, state and a KTRS pension. federal budgets continue to be very tight. For example, John collects a Social Security benefi t of $800 a month. His wife Mary Public pensions are typically stronger, better funded and better managed than private is a retired school teacher drawing a KTRS pension of $1,200 a month. sector pensions, and they have weathered the economic downturn better. We are Eff ects of GPO with Living Spouse currently experiencing a wave of “pension envy” as taxpayer groups are more intent Mary’s Potential Social Security: $800 x 1/2 = $400 on dragging public pensions down rather than working to bring private pensions up. KTRS Pension Calculated for GPO: $1,200 x 2/3 = $800 Kentucky has one of the best, if not the best, teacher retirement systems in the country. Total Monthly Social Security: $400 - $800 = No benefi t It is stable and positioned to pay pensions into the future. Th ere are features built Eff ect of GPO upon Death into the Kentucky Teachers’ Retirement System (KTRS) that make it sustainable and Mary’s Potential Social Security Survivor (Death) Benefi t: $400 a model for other public plans. Th e strength of KTRS has not happened by accident. KTRS Pension Calculated for GPO: $1,200 x 2/3 = $800 It is the result of KRTA and others working hard to build it, promote it, and protect Total Monthly Social Security: $400 - $800 = No benefi t it. KRTA will remain true to its commitment. (Note: If there is no Social Security benefi t, the surviving spouse also could be required 2013 General Assembly to pay for Medicare Part B.) Th e next legislative session will convene on Tuesday, January 8, 2013, in Frankfort. Even in cases where a total off set has not occurred, any increase in the teacher’s Last year, 586 registered lobbyists spent over $13 million to infl uence legislators to pension results in a recalculation of the off set, reducing the Social Security benefi t. Continued on page 7 Continued on page 18 with the opportunity to recognize the importance of education and the role of teachers in that process. I hope each local and district took advantage of this PRESIDENT’S MESSAGE . special time. Hopefully, all took advantage of the opportunity to vote on November 6. Regardless of the outcome, we should remain united in our eff orts to strengthen Leadership & Membership our state and nation. With a membership goal of 29,013 for this fi scal year, I feel confi dent this goal What a great experience to travel with the KRTA workshop will be met and exceeded. Another well deserved “thank you” to all who are team and visit all fourteen districts during August and working to make this goal a reality. As we are oft en reminded, recruitment is September. We really appreciate our partners and friends not a spectator endeavor, but rather is a responsibility placed on each of us. We who accompanied us on our travels across the state and the must remain diligent in our solicitation eff orts to emphasize the values of KRTA valuable information shared with our members. A big “thank Dr. James H. Frank membership. you” to the many who made all the necessary arrangements 2012-13 KRTA President for the meetings, meals, etc. and a special “thanks” to the staff In my travels across the Commonwealth, I am thankful for and impressed by of KRTA, KTRS, AARP and others for their input and assistance. so many of our members who have accepted leadership roles at all levels. Our association could not exist, nor survive, without your volunteer assistance. It was rewarding to witness the enthusiasm and dedication of our KRTA members. I feel confi dent that the legislators who attended, as well as those announcing their Please make plans to attend our 56th state convention on April 22-23, 2013, in candidacies, were equally impressed.