Herald-Leader Editorial

Open books first step in pension fix

Published: August 19, 2012 

No one knows what double, triple dippers get in retiree benefits

Another legislative task force is taking another look at state pension systems, which collectively have an unfunded liability of $20 billion-plus. No doubt, the discussion will play out along the same lines as previous studies:

Republicans, who control the state Senate, will say a switch from the current "defined benefits" plan to a "defined contributions" approach similar to the 401(k) plans popular in the private sector is the only fix for a broken system.

Democrats, who control the House of Representatives and are more closely aligned with public employee organizations, will argue that the fix can be made without abandoning defined benefits.

Barring some sea change in the General Assembly's political balance of power, the task force ultimately will have to find some middle ground if any progress is to be made at all. We'll leave that discussion until later because there is one pension issue on which both sides should agree, and it isn't even on the task force's horizon at the moment.

Simply put, Kentucky's pension systems should be as transparent as the rest of state government. But they're not.

At the most basic level, the lack of transparency keeps the public from knowing what level of pension benefits retirees are collecting from the six state pension systems. Before these folks retired, their salaries were a matter of public record. Why should the level of their pension benefits be different?

Public dollars, in the form of contributions from their government employers and their own contributions from their government salary, formed the foundation for their pensions. There's no rational explanation for exempting the pension benefits built on this foundation from being subject to the Open Records Act, but they are.

Perhaps the best argument for transparency in pension benefits is the gift legislators gave themselves in 2005 that allows veteran lawmakers to leave office, get a high-paying public-sector job for as little as three years and use the average salary from those years to double, triple or even quadruple the pensions they built up as legislators.

And then there are the non-profits that are not really government agencies but have been brought under the umbrella of the Kentucky Retirement Systems, enabling their high-paid executives to retire with enormous pensions.

Over the years, state and local workers were able to retire relatively young, start collecting their pensions and go back to work in their former jobs or elsewhere in the public sector and build up a second government pension. No doubt, some of these retirees have even gone for a third ride on the merry-go-round.

A good argument can be made that these "double dippers" bring experience and expertise back into the government at reasonable value. And recent changes in the law bar new generations of them from starting a second pension. Still, the public has a right to know how working the system this way affects pension benefits, just as it has a right to know how legislators and non-profit executives have worked the system.

However, the need for transparency goes beyond pension benefits and into the operations of the systems themselves. All the systems have issues in this area, but Kentucky Retirement Systems in particular has a long reputation for being secretive.

It took an attorney general's opinion, which carries the force of law in open records cases, to get KRS to release the salaries of its employees. At the time the case arose, one member of the KRS board said the board didn't even know what the employees were paid.

KRS has made significant changes since the 2011 audit. Salaries, audits, board materials and minutes are online now, but contracts aren't. Still, cultural change can be slow and uncertain.

The legislative task force studying state pensions meets again Tuesday, Aug. 21 and will meet monthly for the rest of the year. Surely, it can find time to take up the issue of letting some sunshine in on pension benefits and the workings of the various state retirement systems. It's long overdue.

Order Reprint Back to Top

Find a Home

$2,375,000 Lexington
. Many Possibilities! Great for new horse operation or cattle...

Find a Car

Search New Cars
Ads by Yahoo!