RICHMOND — State representative candidates answered questions at a Madison County Retired Teachers' Association legislative forum Wednesday. Most of the questions focused on policies about teacher retirement and all six candidates were in attendance.

Republican candidate Jonathon Shell and Democratic candidate Brad Montgomery are battling for the 36th-district seat (Garrard and Madison counties) that has been occupied by Rep. Lonnie Napier, (R-36th Dist.) since 1985 and who is retiring.

Democrat JoEllen Reed is running against Republican incumbent Donna Mayfield for the 73rd district (Clark and Madison counties) and Republican Mary Long is running against Democratic incumbent Rita Smart for the 81st district (Madison County).

Each candidate gave a brief introduction about themselves.

Shell said he was an Eastern Kentucky University graduate with agriculture business degree and that he wouldn't be where he was today without the support of some of his teachers in Garrard County.

Although he did not want to touch the teachers retirement system, he said, “I don't have to tell you about the crisis that we're having here in the state of Kentucky with the retired teachers' systems and the retirement system in general.”

“The entire Kentucky retirement system is “between $30 and $24 billion in the hole — something is going to have to be done,” Shell said.

Montgomery told the group he is a entrepreneur who owns Montgomery Farm & Garden in Berea. He also serves as the president of the Berea Chamber of Commerce. He spent 12 years in the Kentucky Army National Guard and previously managed 12 stores for General Parts Inc. during which he oversaw $26 million in assets and inventory.

“I know what it takes to run a business. I feel like I can take my business experience to Frankfort,” he said.

Smart has served as a state representative in the 81st district for the past two years.

“I think many of you know my background,” she said. “I have spent my life in public service here in Madison County.”

Smart used to be a county extension agent and spent a lot of time in the county's schools, she said. She currently serves on the House education committee.

Long is a resident of Berea and has lived in Madison County for more than 30 years. Her children went to schools in the county, she said. “So I've been right there in the trenches with the teachers and the children. I've always appreciated my teachers.”

“I want you to feel secure. You've worked to get where you are,” she told the teachers. “You've retired from a wonderful profession and I want you to feel safe and comfortable.”

Mayfield also has served as a state representative for the past two years and is on the House education committee. She had planned to be a teacher when she was a child, she said, but her parents urged her to accept a job at the U.S. Attorney's office when she was 18 years old.

“I think kudos go to you all for your retirement system because you have done a fabulous job ensuring solvency,” Mayfield said. “I also believe that Social Security is an area that you all are sort of getting the short end of the stick on that as well and I would certainly be supportive of helping you all out with that.”

Reed told stories of her time as a first-grade teacher. She was born in Clark County and worked three years in the State Department of Education as the ombudsman, she said.

She was Winchester's vice-mayor for eight years, served on the Winchester City Commission and is currently a county commissioner on the Clark County Fiscal Court.

“I stand before you as a retired teacher. I've been in the classroom … Your issues are truly my issues, because I'm in the same place that you are,” she said.

Questions for the candidates were submitted beforehand. One of the questions read by moderator Joyce Mosher asked about the candidates' stance on defined benefits retirement plans versus defined contribution retirement plans.

According to the Kentucky Teachers' Retirement System (KTRS) website, a defined benefits plan pays a defined amount based on length of service and final average salary of the employee, along with a retirement multiplier and is a lifetime benefit that is guaranteed by the KTRS.

“A defined contribution plan does not provide lifetime coverage, and for most retirees, would be exhausted by age 80,” Mosher read from the question card.

“Ninety-six percent of retired teachers do not receive Social Security, and that tiny percentage that does has a drastic reduction in benefits,” she continued. “We have 5,319 teachers above the age of 80, so you can imagine that many people being destitute. Will you commit to support defined benefits coverage for current retirees and active teachers?”

Montgomery was the first to respond.

“ I feel your investments are sound and the Kentucky Retired Teachers Association (KRTA) has made good investments and you know how to make investments. I feel if we go to a defined contribution plan, investments would probably not be correctly made. When you've got a lot of people working together like Kentucky's retired teachers, you can make the right decisions. So I am in support (of defined benefits),” he said.

Smart said: “ I am adamant for defined benefits. When I retire, I have define benefits as my main retirement. I also have a defined contribution plan. You know what's happened to the stock market, and I've lost about 40 to 50 percent of that plan. That's one reason I'm not for defined contributions. The other reason I'm not for defined contributions is because people are human, and people do not — especially teachers and even other government employees — have the time or the expertise to study the financial markets, to learn and know how to invest their money. And then, if an emergency comes up, they would take that money out of that contribution and they'll have to pay 25 percent tax on it and that money is already gone. I feel like defined benefits is what people in our state need.”

Long said: “I totally agree with Rita, my husband is my expert on the stock market … I would be in favor of a defined benefits plan. I would first have to look at all of this in-depth. Just from what I understand at this time, I would have to be for the defined benefits plan, because I know that I cannot manage the stock market and our retirement as well as my husband does. And I don't think there are a lot of people that are into it that much. But I can definitely say that I would support a defined benefits plan.”

Mayfield responded: “I absolutely and unequivocally support defined benefits. You all have worked and invested in your future your entire careers … and absolutely we must honor that commitment. It just would not be right to change that for all the teachers. So I absolutely, 100 percent support defined benefits.”

Reed said: “I absolutely, 100 percent for defined benefits. I am a recipient of defined benefits. I think that's probably all I really need to say, but I'm also going to say I think all fiduciary matters that affect teachers need to remain with the KTRS  board of trustees. That's who needs to be making our decisions. I know that study after study has shown, regardless of where we are right now, that those (defined benefits) are more cost-effective than defined contributions. I don't really need to say anymore expect that I am 100 percent, I will not waiver.”

 Shell said: “I also support defined benefit over defined contribution in the KTRS. You all have made the right decisions with your money … What we do have to realize, on the other hand, is that we're $34 billion in the hole. So as current teachers and retired teachers, yes you're going to be safe. But right now, as it stands, the rest of the retirement systems, they've not made the right decisions. We've had legislators in Frankfort taking money out of your system that shouldn't have been taken out of it. They've not made the right investments in other places. So, we're going to have to figure out a way in order to make this last into the future, for future retirees and for the ones that are coming into the system.”

Shell went on to talk about how he's spoken to individuals involved in other retirement systems who have “switched around” bonds to transition their retirement systems into a 401k-style system.

“But the reality of the situation that we live in today is that we have a government that has wasted our time and our money and the direction that these systems have gone. It's not your fault and it's not state employee's faults. But we have to lay the fault on the legislators that have been there for so long and we're going to have to find a solution to this in the future. I do support defined benefits for you all that are here today that are retired and for the current members of the teaching system now. If we are going to be fiscally responsible for the future, we're going to have to figure out something to make this system last. Because $34 billion in debt is not a number we can hold forever, because we're downgrading our credit rating and we're going to go into bankruptcy or have massive tax increases if something doesn't change.”

Shell left the forum after the first round of questions to attend a scheduled engagement.

Another question regarding retirement was “How can we be assured the KTRS will not be used to supplement state government shortfalls?”

Smart was the first to answer this round:

“As your state legislator, one of our jobs is to speak for you. When I went to Frankfort, I said I would be the eyes, the ears and the voice of the people of Madison County. My job is to talk and to develop networks and I think I've done that in my first two years as a state legislator. What I will to make sure that doesn't happen is to speak for you. And contrary to what the gentleman (Shell) just said about former legislators, I don't agree with him on that point because Rep. (Lonnie) Napier and (former) Rep. (Harry) Moberly stood strong for education. There was some problems with people that were overseeing the retirement groups. And, the truth of the matter is, that we have not taken money — we've not had enough money in Frankfort and we've taken what should have been for the retirement and put it for other projects that are needed. The whole thing is going to come down to taxes. How much revenue are we going to have to support the programs that the people of Kentucky need and want?”

Long said: “I don't think there are any promises I can make, or that anyone can make to retired teachers or teachers that have not retired. All we can do is go to Frankfort and use our one voice as loudly and strongly as we possibly can to protect what you have worked for and these young teachers are working for now. I don't think it's fair for anyone to raid any retirement fund to do something else. It's there for you. I know that monies are needed in Frankfort, but maybe we should think about monies that need to be cut. Can you continue to do what everybody wants, instead of saying, 'These are the things we need. These things are wonderful, but Kentuckians just can no longer do it.' So I would go to Frankfort and do my best to protect what you have worked hard for.”

 Mayfield replied: “One thing I can tell you as a legislator is that you have my word that I will oppose any raid of your pension system to cover shortfalls elsewhere. It was a mistake when it happened the first time. It's always going to be a mistake. I always heard 'You don't rob Peter to pay Paul' and I still very much believe that. I think we have a lot of different issues up in Frankfort. I think there are areas that are underfunded, but I think there some areas that have more money than should be allocated to them. I think that takes a lot of research, a lot of time and a lot of tough decisions, but raiding your retirement pension is not the answer, it will never be the answer. I would certainly stand up and voice my very vocal support that's not the answer.”

 Reed said: “The KTRS is the most well-managed system in Frankfort that has been watched over for years. We have a good board and each of us every year elects those people to go on that board and protect us and protect our funding and our medical insurance and watch over what is good for teachers. I will stand right behind you, all the way, I'm 100 percent. I don't normally use the number 100 percent, but when it comes to my profession, I'm a 100 percent. And to not let anyone dip into our retirement funds to cover somebody else's shortfalls. Somebody went to sleep somewhere along the way behind the wheel with these retirement systems, but the teachers retirement system has always been well-managed. I am thankful that I am a member of that system and it has been well guarded, but I will oppose any and all efforts to borrow from the KTRS, or even take a quick loan out of the teacher's retirement system. That is our money that has gone in there , that we've worked hard for and I will protect that to the very end.”

Montgomery said: “I would not support any efforts to dip into the KTRS. I don't feel it's right. Tax revenue is always an issue with us at the state level, it's always going to be an issue. But we've got to learn how to use our tax dollars and use them wisely. It's just like in business, when I bring a product in my store and it sits there on the shelf and doesn't sell, guess what I do? I get rid of it. I believe if we take a targeted approach at our government when handling expenses and also when using our resources, I believe we can fix some issues in Kentucky.”