pensions

Pension Bill Won't Include Mandatory 401(k)-Style Plan

Feb 15, 2018
J. Tyler Franklin

An overhaul of one of the country's worst-funded public pension systems will not include a mandatory move to a 401(k)-style plan because Kentucky legislative leaders say it would not save enough money.

Senate President Robert Stivers said the bill, which has not yet been filed, won't require all new hires and employees with at least 27 years of service to move into a 401(k)-style plan. That was the cornerstone of an earlier proposal endorsed by Republican Gov. Matt Bevin and the Kentucky Chamber of Commerce.

LRC Public Information

Republican leaders of the state legislature say a new proposal to overhaul the state’s public retirement systems will be unveiled later this week.

Kentucky’s pension systems are among the worst-funded in the nation and Gov. Matt Bevin, along with many in the Republican-led legislature, wants to change how much state workers earn in benefits in order to reduce the state’s pension liability in the future.

J. Tyler Franklin, WFPL

The Kentucky Democratic Party says pension reform shouldn’t come from a demand letter by wealthy Republican activists. 

The Lexington Herald-Leader first reported that in the letter to members of the General Assembly, the state GOP chairman said any pension changes must include moving future teachers and state workers from a defined benefits system to a defined contribution plan.  The letter was also signed by national anti-tax activist Grover Norquist and Bill Samuels, Jr., chairman emeritus of Makers Mark, among others. 

J. Tyler Franklin

Kentucky Democratic Attorney General Andy Beshear's office has ruled that Republican Gov. Matt Bevin's administration should release to the public a document showing how much Bevin's pension reform proposal would cost.

The Lexington Herald-Leader reports Beshear's office ruled this week the document should be released because a Michigan firm that produced the actuarial analysis had given Kentucky its final report.

Ryland Barton

This week, the state legislature continued to preoccupy itself with a sexual harassment scandal in the House of Representatives. After saying he would resign, and then he wouldn’t, Rep. Jeff Hoover formally resigned his post as Speaker of the House.

Meanwhile, a new pension bill still hasn’t emerged. But on Friday, Gov. Matt Bevin got some good news in the form of federal approval for his proposal to overhaul the state’s Medicaid system.

Kentucky Public Radio’s Ryland Barton has this week’s edition of Kentucky Politics Distilled.


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A month ago, Republican leaders of the state legislature said they hoped to pass major changes to the state’s pension systems within the first two weeks of the legislative session.

The first two weeks are now in the books and a new pension bill isn’t in sight ahead of Gov. Matt Bevin’s State of the Commonwealth and Budget address on Tuesday evening.

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Lawmakers are still working on revisions to a massive bill that would overhaul the state’s pension systems, but push-back from public employees and a statehouse sexual harassment scandal have slowed down the process.

In October, Gov. Matt Bevin and Republican leaders of the legislature unveiled a plan that would phase out the state’s use of a pension system that guarantees benefits for life and tinker with benefits of current employees.

J. Tyler Franklin

Kentucky Gov. Matt Bevin says the state will undergo a round of spending cuts in the upcoming legislative session to set aside more money for the struggling pension systems amid sluggish revenue growth.

In 2016, Bevin and the Democratic-led House and Republican-led Senate crafted a budget that set aside more money for the public retirement systems than ever before: $1.2 billion out of the state’s $21 billion biennial budget.

Office of Sen. Brown

Retired union coal miners are joining teamsters, iron workers and other union retirees in an effort to shore up their ailing pension plans, and they hope the ticking clock on a government spending bill will help.

Some Democrats want to see protections for retirement benefits included in the omnibus spending bill, which Congress must pass in order to prevent a government shutdown. That could set up a year-end showdown over the spending bill, with major implications for retirees in the Ohio Valley region.


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State legislators say a special session to discuss Kentucky’s ailing pension system probably won’t happen this year.

Gov. Matt Bevin suggested a special session to address the state’s pension in November. It’s currently one of the most underfunded systems in the nation. But during a Kentucky Public Radio News Special Tuesday evening, Democratic State Senator Morgan McGarvey said a special session now would waste taxpayer dollars.

J. Tyler Franklin

Gov. Matt Bevin’s administration is asking for a redo of an analysis that says his proposed changes to the teacher pension system would cost taxpayers an extra $4.4 billion over the next 20 years.

Bevin has proposed moving future teachers into 401(k)-style retirement plans and increasing the amount of money the state puts towards the system every year.

The analysis by Cavanaugh Macdonald Consulting showed that under Bevin’s plan, the state wouldn’t see savings until 2034.

Budget Director John Chilton said the analysis used incorrect assumptions of retirement patterns and of how much money the pension system would make from its investments.

Kentucky Educators Announce Pension Reform Plan

Nov 6, 2017
Creative Commons

Leaders from several Kentucky education groups have announced a pension reform plan that they say is a sustainable approach.

The Courier Journal reports the plan announced Monday would leave most retirement benefits in place for current and retired teachers, while a hybrid plan would be created for new teachers hired beginning next summer. Those teachers would participate in a defined benefit system and be able to supplement retirement savings with voluntary contributions to an investment account.

Kentucky Colleges Seek More Funding in Tight Budget Year

Nov 3, 2017

Kentucky's public colleges and universities want more money, but Republican lawmakers say the best they can hope for is to break even.

The Council on Postsecondary Education approved its two-year budget request Friday, asking for an extra $160 million in state funding for the state's eight public universities and its network of community and technical colleges.

About 35 percent of that money would be for additional operating expenses, while the rest would be a combination of debt payments and retirement contributions.

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As Kentucky lawmakers consider moving most future and thousands of current workers into 401(k)-style retirement plans, the commonwealth can look to a few other states that have had to address pension issues in the wake of the recession.

Many states have enacted changes that shift more of the burden of public retirement programs onto employees, require increased employee contributions and tweak benefits.

Ryland Barton

Hundreds of state employees and retirees rallied on the steps of the State Capitol Wednesday night, protesting Gov. Matt Bevin’s proposed changes to the state’s troubled pension plans.

The governor’s proposal would move most future state workers and thousands of current ones away from defined benefit plans and onto less-generous 401(k)-style plans. State workers who reach 27 years of service would have their benefits capped and be forced to transition to the new plans.


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