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Sick leave reform estimated to save taxpayers $50 million per year

Beau Barnes, Deputy Executive Secretary to Kentucky’s Teachers' Retirement System (TRS) testified before the Public Pension Oversight Board this week about the pension system’s most recent Actuarial Experience Study. The study, which is conducted every five years, compares actual with expected experience, looks forward to the future performance of the plan and recommends revised assumptions in accordance with its findings.

Along with changes to the system, such as the actuarial assumption rate being lowered from its current 7.5% to 7.1%, Barnes reported that sick leave liabilities will increase to $120 million, adding to TRS’ ballooning unfunded liabilities that stood at over $35 billion as of June 2020. According to Barnes, accruing sick days in order to enhance a retiree’s final compensation is recommended to teachers and employees by superintendents and staff who seek to “discourage absenteeism in the classroom.”

However, Barnes estimates that reforming this practice, as BIPPS advocates, would save taxpayers around $50 million per year, helping to curb the yearly increasing costs to taxpayers to fund the system.

You can watch the full meeting here.

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