The order prohibits former legislators appointed to executive or judicial branch positions from engaging in a practice known as "pension spiking".
Members of the Kentucky General Assembly who began participating in the Legislators' Retirement Plan prior to January 1, 2014, are entitled to a defined benefit pension. The pension payout is calculated using a formula based on the individual's number of years of service, multiplied by the average of the highest three years of salary. This amount is then multiplied by a percentage called a benefit factor to determine the individual's pension payout.
In 2005, the General Assembly passed HB 299, which made several changes' to legislators' pensions. Among these changes, the law lowered the number of years legislators must serve before they can retire without a penalty prior to age 65 from 30 years to 27 years. The law also decreased the number of years used to figure lawmakers' pensions from the average of the "high five" years to the "high three" years, and introduced a policy known as reciprocity. Reciprocity allowed legislators to base their pensions on higher-pay state jobs that they held either before or after their years in the legislature.
Under his administration, Bevin required former and current legislators to begin collecting their legislative pensions before beginning new employment in his administration, keeping their pension based only on their high three years of legislative service, instead of higher-paying executive branch positions.
"It is outrageous that legislators like Rocky Adkins are now attempting to enrich their own pensions by accepting high-paying positions in the Beshear Administration," said Gov. Bevin. "I'm asking Leader Adkins to retire from the General Assembly prior to his appointment in the executive branch so that his higher salary is not included in his final pension calculation. Additionally, I'm asking the Governor-elect to follow the executive order issued today and prohibit any and all pension spiking in his administration."
The executive order signed Thursday would continue the policy implemented during Bevin's administration.
