pension reform

Chief Justice Won't Remove Judge in Pension Case

Jun 6, 2018
Public Domain

Kentucky Chief Justice John D. Minton Jr. has denied a request by Republican Gov. Matt Bevin to disqualify a judge from ruling on a lawsuit challenging the legality of a bill that overhauls the state's pension system.

Bevin signed a law earlier this year that would move all new teachers into a hybrid pension system. It would also change how current teachers use sick days to calculate their retirement benefits. Democratic Attorney General Andy Beshear sued to block the law, saying it was unconstitutional.

Ryland Barton

Kentucky Attorney General Andy Beshear said his office has won another victory in the effort to have recent changes to the state’s pension plans declared unconstitutional.

A judge has issued a protective order related to the case. The order will prevent Governor Matt Bevin’s administration from taking sworn testimony from three organizations named in a lawsuit challenging the constitutionality of the pension bill.

 

Franklin Circuit Judge Phillip Shepherd ruled against Governor Bevin’s request to depose the office of the Attorney General, the Kentucky Education Association and the Kentucky State Lodge Fraternal Order of Police. In a video statement Beshear praised the judge’s decision granting the protective order.

Fate of Kentucky's New Pension Law to Be Decided by July

Apr 19, 2018
Ryland Barton

A Kentucky judge says he plans to decide by July 14 whether he will block a new law making changes to Kentucky's troubled pension plan from taking effect.

State lawmakers passed a law earlier this month making changes to the state's underfunded pension system. Democratic Attorney General Andy Beshear sued, saying it violates the state constitution and lawmakers broke the law when they passed it.

Ryland Barton, Kentucky Public Radio

Teachers from across Kentucky are holding a rally in Frankfort on Wednesday, March 21 to protest proposed changes to the state pension system and support funding for education. 

It’s being called a ‘Day of Action’ and several school districts, mostly in eastern Kentucky, have canceled classes so teachers can participate. Some districts, like Owensboro, are holding regularly scheduled classes but sending delegations of teachers. The Owensboro Education Association is planning to send 21 teachers.

Ryland Barton

Kentucky's attorney general says a public pension overhaul proposed by Republican lawmakers would not withstand court challenges likely to follow if the measure becomes law.

Democratic Attorney General Andy Beshear weighed in on one of the legislative session's defining issues shortly before a Senate committee was scheduled to review the pension bill.

In a letter to lawmakers, Beshear said Wednesday that the bill would break the inviolable contract between the state and its public employees.

Teachers across Kentucky are giving mixed reviews on a new plan to reform the state’s retirement systems for public sector workers. 

One Warren County teacher credits lawmakers for making compromises, but says the legislation still balances pension reform on the backs of public servants. 

Kim Coomer teaches high school students at the Warren County Area Technology Center.  She praises lawmakers for not forcing current teachers into defined contribution, or 401(k)-style plans.  Coomer says having a guaranteed benefit is important for teachers because they don’t get social security benefits to act as a buffer in retirement.

J. Tyler Franklin

A new proposal to overhaul Kentucky’s public pension systems has been filed in the state Senate.

Though full details of the proposal hadn’t yet been unveiled by Tuesday evening, Senate Republican leaders say it differs greatly from a version pushed by Gov. Matt Bevin last fall.

Sen. Joe Bowen, a Republican from Owensboro, said Bevin’s proposal would have cost the state more by shifting most future and some current workers into 401(k)-style retirement plans, known as “401(a)s”.

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A group of former and current public workers is suing three hedge funds for selling risky investments and overstating returns to the agency that manages Kentucky’s struggling pension fund.

The lawsuit filed Wednesday seeks damages from hedge funds KKR Prisma, Blackstone and PAAMCO.

The workers allege the funds sold “unsuitable ‘black box’ investments” in 2011 with massive fees to the Kentucky Retirement Systems, according to a summary of the 124-page lawsuit filed Wednesday in Franklin County Circuit Court.

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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.

Flickr/Creative Commons/ NCSSM

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.

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