FRANKFORT-- Just a year ago, thousands of teachers came to the Capitol, unhappy with a pension bill proposal.

Freshman Representative Scott Lewis says he thinks teachers will support his new pension bill- House Bill 504. The Republican from Hartford is an educator who puts in to the Teachers' Retirement System.

He says he understands how important pensions are to teachers.

His proposal, House Bill 504, wouldn't impact current teachers at all. It would only change the pension system for people who start working after January 2020.

Beau Barnes, the Deputy Executive Director of the Teachers' Retirement System, says his office did offer input on this bill, and he's familiar with the impacts of it. 

Barnes explained, here are two main benefit sections foundational and supplemental.

It's an 8 percent match for the foundational benefit. Barnes elaborated, explaining, "They work, they reach age 55, and they have to be at least age 55, to retire, and they have at least five years, they can get some kind of minimum benefit. But basically, this plan is designed to encourage teachers to to work well past current retirement ages. The current retirement age for teachers is age 59. They do have an opportunity to retire earlier if they want to, but there's an incentive for them to teach longer."

Both Lewis and Barnes have stressed a majority priority is giving teachers a defined benefit plan, which HB 504 does.

A graph provided by TRS shows how much teachers making 50 thousand dollars would make depending on their start age and vested years. 

A person who starts working at 25 and puts in 30 years would take home $21,000 in the foundational benefit. However, if that same person kept working until 65, she would take home almost $66,000 annually.

Once a teacher hits 62 years old and 33 years of service,  the benefits cap out. Currently, teachers get full benefits at 27 years.

Barnes explained teachers will also have a second benefit,  a supplemental benefit. "That operates where the teacher puts two percent of their paycheck and the commonwealth puts 2 percent of the paycheck into this fund. This savings component that's in the supplemental plan which they can either have a lump sum refund of that, or they can seek to annuitize that as well. And in additional to those mandatory contributions of 2 percent by the teacher and two percent by the state, voluntary contributions may also be made by the teacher or by the state to build it up."

This bill is also different than the current pension system when it comes to Kentucky's responsibility. "This bill caps the Commonwealth's obligation at that 10 percent. They do not pay any more than 10 percent and they have no responsibility for the unfunded liability for this new group. And there will be no unfunded liabilities starting off with. It's a hundred percent funded, they have no liabilities, they're starting out new," said Barnes.

The statute says the pension must be 90 percent funded. If it drops below that, Barnes says different securities will go into effect. He explained, "There's a stabilization account, where if we have additional funding coming in we don't need. In good years, it goes in there- kind of like a rainy day fund."

If the problem is just with the foundational fund,  that's where the supplemental fund can come in. 

"There will be a reduction in the mandatory employee teacher contributions to the supplemental fund- that two percent, a mandatory reduction in the employer contribution of two percent to the net fund, so you can reduce it to two percent from each to maybe one percent, one and a half percent, and then have that money go over to the foundational fund, so for example, if it goes down to 95 percent, and you want to fund it to a hundred percent, take some of that money there, for a short period of time, move it over here, get it up to a hundred percent funded in the foundational, and then when it's there, you can move it back," said Barnes.

Barnes said there are other securities as well, pointing out "There's other triggers as well. You could potentially raise retirement age, change benefit factors, you could reduce or suspend cost of living adjustments. There are a number of measures that the board would be required to take to ensure that this foundational, this lifetime benefit remains always a hundred percent funded."

Kentucky Education Association, the Commonwealth's largest teachers' union says they are still reviewing the bill and don't yet have an official position on it.