FRANKFORT — A working group established to provide recommendations to the legislature on how to shore up the Kentucky Teachers Retirement System will instead offer an “informational report” which includes a variety of options from which legislators may choose.

That’s how the group’s chairman, David Karem, characterized the final report of the group of stakeholders and lawmakers which has been meeting since summer.

The decision to offer options from which to choose seemed to confound some, including Rep. Brad Montell, R-Shelbyville, and House Speaker Greg Stumbo, D-Prestonsburg. Both suggested the final report should include more concrete recommendations.

Outgoing Gov. Steve Beshear appointed the 23-member group in June, charging it with formulating recommendations for the 2016 General Assembly which convenes in January. KTRS faced a $14 billion shortfall at the time.

But it became clear early on that a wide gap existed between members of the group who on one side wanted to address the problem by restructuring benefits and the on the other by those wishing to preserve benefits by infusing the system with more funding.

The dilemma of what to do for a badly underfunded system — its representatives say it needs more than $400 million in increased funding to become financially stable — is further complicated by the election of Republican Matt Bevin who will be inaugurated as governor next Tuesday.

Bevin wants to move all future hires — both teachers and state employees — into a 401K style defined contribution plan and has talked about moving teachers into Social Security.

But included in the group’s report are conclusions that defined contribution plans aren’t as financially attractive as supporters may believe and another that moving teachers to Social Security reduces their benefits while saving the state little or no money and isn’t considered a serious option by the group.

Defined contribution plans, the draft report says, produce less return than defined benefit plans and as fewer employees pay into the existing system — because new hires won’t participate — liabilities for those covered by the existing plan will become increasingly expensive.

Bevin addressed that in a recent speech before a meeting of statewide county officials, telling them the money would have to come from the General Fund at the expense of nearly all other government programs and services.

The work group’s report says increased contributions from employers (state government through the General Fund or local school districts) will be necessary. It also says pension obligation bonds — something Bevin and Republican members of the group like Sen. Joe Bowen oppose but which have been proposed by Stumbo — might be part of an overall solution but can’t be the only means of shoring up the system.

One solution might be a gradual increase in contributions from the state, adding about $185 million in contributions in the first year and increasing to $433 million in five years. Those amounts would be on top of current contributions.

The report also addresses possible benefit changes, both for current and future teachers. For current teachers, benefits could be based on the highest five years of salary rather than on three; unused sick days would be converted into service credit rather than a salary credit which would somewhat lower benefits; and a multiplier on years of service could be reduced slightly.

Future teachers might have to work longer and contribute more into their retirement accounts; benefits could be calculated on seven years of salary; and cost of living adjustments might be smaller.

The inability of the work group to agree on concrete recommendations hasn’t altogether dampened hopes for some sort of agreement, according to some.

Both Bowen and Sen. Jimmy Higdon, R-Lebanon — a member of Senate leadership but not formally a member of the work group — both said they remain optimistic an agreement on how to proceed can be reached.

Higdon confirmed, “there have been discussions” between contending sides behind the scenes and said, “I’m optimistic we can find common ground.”

Jason Bailey, executive director of the Kentucky Center for Economic Policy and a member of the work group, said he hasn’t participated in those discussions. But asked if they hinge on an agreement to increase funding in a relatively brief period of four to five years in exchange for benefit reductions for future hires, Bailey said he’s been told that is the general outline of the discussions.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.