pension reform

A leader of Kentucky’s state senate says a “watered down” version of Gov. Matt Bevin’s pension proposal is being drafted but it would still shift future workers onto 401(k)-type retirement plans.

Senate Majority Floor Leader Damon Thayer said he hopes the bill is revealed to the public before Christmas so it can be reviewed in advance of lawmakers’ return for the legislative session that begins on Jan. 2.

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Solutions to Kentucky’s pension crisis proposed by Gov. Matt Bevin and Republican lawmakers have stirred opposition from educators.

One of the proposals that concerns Somerset Independent Schools Superintendent Kyle Lively is that unused sick days would no longer be calculated into teacher pension benefits after July 2023. He said that change could have a dramatic impact on his district’s 137 teachers and administrators, because a large percentage of them are the 22- to-23-year mark in their careers. He fears they may decide to retire earlier than they had planned.

Lisa Autry

Some Kentucky lawmakers say drastic recommendations issued to pay down the state’s pension debt have no legislative support. 

Legislators from south central Kentucky addressed a packed room last night of public workers and retirees in Bowling Green concerned about how pension reforms will change their benefits.  Among them was Terry Eidson who retired from state government in 2006.

"Employees and retirees are feeling a little devalued and demeaned in all this, and it just doesn't sit well," Eidson told WKU Public Radio.

Kentucky’s public universities are debating whether to break off from the state’s troubled retirement system and create a pension plan of their own. 

New Western Kentucky University President Timothy Caboni says it’s an idea that has to be considered.   He told WKU Public Radio that pension obligations are consuming an increasing amount of money from university budgets. 

"One of the things I've learned in the last few months is how much of a cost driver pensions are for WKU," stated Caboni.  "In one of our pension systems, the university's contribution in the past decade has gone from eight percent of an employee's salary to 48 percent."

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Gov. Matt Bevin said he wants to find more revenue to put toward Kentucky’s ailing pension systems and overstretched state budget, but not everyone is on board if the governor’s solution would mean tax increases.

Bevin said he wants to call lawmakers back to Frankfort later this year to hammer out a plan that would help the state generate more revenue through economic growth and eliminating tax breaks.

Republican lawmakers have historically been wary of tax increases, but Sen. Joe Bowen, a Republican from Owensboro, said lawmakers might be forced to consider it given the state’s financial jam.

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A bill that would have enacted transparency measures for Kentucky’s ailing pension systems failed to pass this legislative session, despite a last-minute push.

Some lawmakers say the systems need more scrutiny from the legislature. They’ve criticized hefty fees paid to investment managers and devotion to so-called “alternative investments,” which they’ve said are too risky.

Chris Tobe, a former Kentucky Retirement Systems trustee who has been critical of the system, said investment managers should compete to manage Kentucky’s pension assets in public view.

“We need to have open contracts and some kind of documentation and bidding process. Secret backroom deals is not good government,” he said.

The bill would have revealed how much and to whom the pension systems pay to invest pension funds. Kentucky law exempts the investments from open records laws.

Kentucky LRC

A top state pension executive told legislators on Wednesday that a bill requiring greater transparency of the pension systems for Kentucky’s public employees would be harmful to his agency.

Regardless, a Senate committee unanimously approved the bill.

The bill would make the pension systems for state workers, teachers and state officials subject to open records requests. Pension managers would also have to disclose investment holdings, fees and manager commissions.  Investment contracts would be subject to review by the state auditor and legislative committees.

State Sen. Joe Bowen, a Republican from Owensboro, said the changes have been demanded by Kentucky residents.

“They want accountability, they want transparency and they want us to have the capacity to be proactive on these challenges that we’re facing in today’s world, as opposed to being reactive,” Bowen said.

Lawmakers Briefed on KRS Investments

Aug 29, 2014

State lawmakers are calling for more transparency in how the state’s largest pension fund invests its money into secretive hedge funds and private equity.

Pension Oversight Committee co-chair Sen. Joe Bowen, a Republican from Owensboro, pressed KRS’ investment officer David Peden over the lack of transparency of its investments, saying, " If statute required it, this would have to become transparent. So using that scenario are you saying to us that these current consultants, managers that we got would go away?"

Kentucky's legislative leaders have passed two bills to shore up the state's underfunded pension systems, effectively staving off a special session on the issue.

The new plan would reduce a personal tax credit of $20 to $10, generating roughly 33 million in revenue that would go to General Fund, but lawmakers would use for pensions. It would also use revenue from technical changes in the state's tax code, as well as money from federal tax changes.

Overall, the plan would generate $96 million in the 2015 fiscal year and $100 million in 2016 fiscal year.

In a news conference with legislative leaders after the bill passed, Governor Steve Beshear said the process will work as a template for other states.

"This is a good solution to a thorny problem. A solution that other states around the country will be looking at as they look at options to solve their own crises," Beshear said.

Office of Ky Governor

State leaders are still working to find solutions to the Kentucky's troubled pension system —but he's not promising a deal the time the General Assembly regular session ends next week, Gov. Steve Beshear said on Monday.

Beshear has mediated sessions between House and Senate leadership on reforming the pension systems and how to fund them, after the chambers came to an impasse on the issue.

Those conversations have continued since the General Assembly adjourned last week for the veto period, but Beshear said he can't predict whether legislators will strike a deal before the 2013 session ends.

"One can never predict what will happen in the end, particularly in a legislative session but I feel good about where we are right now," Beshear said.

If lawmakers can't reach a deal, a special session to deal with the issue is likely.

Kentucky LRC

A Warren County lawmaker says he feels good about the chances of a pension reform measure being finalized by the end of the legislative session. Republican Representative Jim DeCesare told WKU Public Radio he doesn’t think there are many differences remaining between the two parties.

“It was my understanding that when we left there both sides weren’t that far apart," said the Rockfield lawmaker. "We just have some details to work out on three or four main issues. And the hope is that they can come to some sort of a conclusion and some kind of result that everybody can live with.”

DeCesare said pension reform is “without a doubt” the single most important issue lawmakers need to hammer out before the session ends. A bill passed by the Republican-led Senate creates 401-K like retirement plan for new government workers, while a House-passed bill would use money raised from the lottery and horse tracks to fund the state’s pension contributions.

Most Kentucky lawmakers are back home for the next week-and-a-half, while some conferees remain at the state capitol trying to work out differences between the House and Senate. All lawmakers will return to Frankfort March 25-26 for the final two days of the regular session.

Kentucky LRC

Two priorities of Kentucky lawmakers will spill over to the so-called veto period of the 2013 legislative sessions after the issues could not be resolved by the end of Tuesday.

Legislators were unable to compromise on pension reform and the military electronic voting bill before both legislative chambers adjourned until March 25.

Legislative leaders said talks on pension reforms are still progressing and that a conference committee has been set up to find a compromise on the military voting bill. Earlier Tuesday, Gov. Steve Beshear said a special session appeared more likely because the General Assembly appeared to lack agreement on reforms to the state's underfunded pension system.

House Speaker Greg Stumbo, a Democrat, said the talks on pension reform have been encouraging despite the lack of a deal before legislators adjourned Tuesday.

With no deal and time running out, a special session is becoming more likely for Kentucky lawmakers to reform the underfunded pension programs for state employees, Gov. Steve Beshear said on Tuesday.

It's unlikely that the General Assembly will address pension reform before legislators leave Frankfort after Tuesday for a brief period called the veto break, Beshear said. Legislators have

Two pensions bills aimed at reforming Kentucky's underfunded pension system havebeen locked in a stalemate between both chambers of the state legislature,  with both refusing to accept a bill based on procedural technicalities.

While legislative leaders have met routinely since last week on the pension issue, Beshear said they are still far apart—meaning a special session is becoming more likely.

Kentucky LRC

With time running short, several key bills, including one to increase Kentucky's high school dropout age to 18, still were pending in the Legislature heading into the weekend.

The odds grow longer with each passing day as lawmakers and the Governor negotiate.

Gov. Steve Beshear told reporters Friday that he hopes compromise legislation on the dropout bill will become law in time.

He said a bipartisan proposal is being crafted that would allow school boards to vote on increasing the age in their districts. After 55 percent of school districts raise the age, the remaining districts will have to follow suit during the next four years.

No Breakthroughs Yet on Kentucky Pension Reform

Mar 8, 2013

Gov. Steve Beshear has concluded a meeting with a bipartisan group of legislative leaders without breaking an impasse on pension reform legislation.

The Democratic-controlled House and Republican-led Senate have been at loggerheads on how to shore up the financially troubled pension plans for state and local government retirees.

House Speaker Greg Stumbo called the Friday morning meeting a first step. He's said everyone involved wants to resolve the issue now to avoid the cost of a special legislative session later.

Among the major sticking points: A Senate proposal to create a 401(k)-like retirement plan for new employees and a House proposal to use money from the lottery and horse tracks to boost the state's yearly pension contribution.

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