Governor Bevin's Pension Plan Passes State House

Kentucky Gov. Matt Bevin's pension-relief proposal has narrowly passed the state House after a more than three-hour debate as a midsummer special legislative session continues.

The 52-46 vote Monday was a pivotal test for Bevin's plan to assist regional universities and quasi-governmental entities strapped by surging retirement costs. Those agencies include public health departments, community mental health centers and domestic violence shelters.

The bill received the votes to pass, but Democrats and others who opposed it argued that it breaks the inviolable contract with agency employees because it could affect their benefits.

Rep. Chris Freeland said without the bill, the agencies' pension contributions would jump from around 49 percent of payroll to more than 80 percent, but if enacted, it retroactively freezes the contribution rate for this year. He said agencies and colleges told him they desperately needed that reprieve.
He added, "We'll still have this next session to work out some things to help some of the tier one and two employees, and that was the hold-up for many on this bill, but that's something that will, again, will not go into effect until April 30 of next year, so we'll still have some time to fix that."

WDRB reports sponsor Rep. James Tipton says that the bill gives agencies a one-time window to decide if they want to leave the system or stay. If they choose to leave they could pay their financial obligation with an installment plan or in one lump sum payment. Each agency will also have to decide whether to place employees in a 401(k) style plan or keep them in the system. Tipton admitted that there are no good options, but had predicted that the bill would pass by a slim margin.

Rep. Randy Bridges of Paducah told West Kentucky Star that Monday's vote was the right thing to do since there were no other suitable options.

"All of the other alternatives were just kicking the can down the road and their actuarials were skewed. Based on outpouring from my constituents, this was the right vote to make," he said. 

Area representatives Steven Rudy, Richard Heath, Lynn Bechler, Randy Bridges, Chris Freeland, Larry Elkins, and Walker Thomas all voted yes on the bill. The measure now goes to the GOP-dominated Senate. A Senate committee is expected to take up the bill Tuesday, and the full Senate could vote on it Wednesday.

Over the weekend, Democratic Attorney General Andy Beshear questioned the language in Bevin's proclamation calling lawmakers into special session.

Beshear said Saturday that Bevin's proclamation tried to dictate the contents of any pension-relief legislation passed in the session, and it, "runs roughshod" over the Constitution and puts any bill that passes at risk of a lawsuit.
 
Bevin's deputy chief of staff, Bryan Sunderland, said such claims were "absurd."
 

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