pensions

Thinkstock

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.

Thinkstock

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.


J. Tyler Franklin

Gov. Matt Bevin is taking his proposed pension changes on the road this week, pitching business groups across the state about his bill that would — among other things — move most future and some current state workers onto 401(k) style plans.

The plan has drawn fire from state employees who worry that future hires and current workers affected by the changes would receive less-generous benefits from the state.

J. Tyler Frankin

Gov. Matt Bevin Monday defended his proposal to change the state’s pension systems before a group of business leaders in Lexington.

Late last week, Bevin released a much-anticipated draft of a bill that would move most future and some current retirees onto less-generous 401(k)-style plans.

The proposal would also tweak benefits to current employees and retirees, drawing fire from state employee groups that say the changes would be illegal.

Thinkstock

Gov. Matt Bevin has released a much-anticipated draft of a bill that would make massive changes to the state’s pension systems, which are facing critical financial problems. The 505-page proposal was crafted with Republican leaders of the state legislature and aligns with a summary of recommended changes Bevin presented a little more than a week ago.

If implemented, over the coming decades the plan would mostly phase out the state’s use of a pension system that guarantees benefits to state retirees for life.

J. Tyler Franklin

Kentucky’s state budget director said Gov. Matt Bevin will soon enact mid-year budget cuts to help avoid a projected revenue shortfall at the end of the fiscal year.

Earlier this month, a panel of economists tasked with predicting how much money the state will bring in projected the state would be about $155 million short of its initial estimates.

That move cleared the way for Bevin to make an official budget reduction plan — spending cuts to state agencies that don’t have to go through the conventional budgeting process.

Thinkstock

Representatives of state employees, teachers and police officers aren’t happy with Gov. Matt Bevin’s proposal to offer less-generous retirement plans and tinker with state worker benefits in an effort to save the state’s ailing pension systems.

David Smith, executive director of the Kentucky Association of State Employees, said the organization will hold a “torches and pitchforks” rally at the state capitol if Bevin calls a special legislative session for lawmakers to vote on the proposal.

Creative Commons

The superintendent of Owensboro Public Schools says the pension proposal unveiled by Kentucky’s Republican leaders is "second-rate" compared to the current retirement system. 

Dr. Nick Brake applauds GOP leaders for not raising the retirement age to 65 for teachers, but fears that other reforms, if enacted, would make it harder for the state to attract quality educators.

J. Tyler Franklin, WFPL

Gov. Matt Bevin and Republican leaders of the state legislature have released a proposal that would make major changes to the retirement plans for teachers and other state workers.

The proposal would phase out the state’s use of a defined-benefit pension system, which guarantees payments to state employees throughout their retirements.

Instead, nearly all future and some current employees would be moved into defined contribution plans like 401(k)s, which will require the state to put less money into employee retirements.

Bevin said the changes are necessary to keep the pension system alive.

“If you are a retiree, if you are working toward retirement and hoping to retire at some point, you should be rejoicing at this bill,” Bevin said.

Thousands of public employees and teachers in Kentucky are waiting with nervous anticipation to find out what changes Kentucky lawmakers will make to their retirement plans.  The pension systems face massive shortfalls and have been rated among the worst in the country. 

Employers also have skin in the game as skyrocketing pension costs threaten their budgets and daily operations.  In a letter last month to all employers in the Kentucky Employee Retirement System, or KERS, State Budget Director John Chilton warned that pension costs could rise to as much as 84 percent of payroll in the next budget.

"As a non-profit, we’ve got no place to get that," said Finance Director Debbie Chandler at Barren River Area Safe Space.

Thinkstock

A federal judge has dismissed a lawsuit that challenged Kentucky’s historical underfunding of the state’s teacher pension system, but the plaintiffs say they will file the lawsuit again in a state court.

The Teachers Retirement Legal Fund argues that over recent decades, state leaders broke the law by not setting aside enough money for the Kentucky Teachers Retirement System, which manages the pensions of about 141,000 current and retired teachers.

Pages