Stumbo: Senate is working on a funding plan for pension system

jbrammer@herald-leader.comMarch 20, 2013 

House Speaker Greg Stumbo, D-Prestonburg, in the House of Representatives on Tuesday March 12, 2013 in Frankfort, Ky. Photo by Mark Cornelison | Staff

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FRANKFORT — The Republican-led Senate is drafting a plan to help pay for an overhaul of the state pension system, according to House Speaker Greg Stumbo, D-Prestonsburg.

"I understand the Senate is working on a funding plan, but I haven't seen the details yet or spoken with anyone in the Senate about it," Stumbo said Wednesday.

Senate President Robert Stivers, R-Manchester, did not deny Stumbo's assertion, but noted that Senate leaders have not presented a proposal.

"The governor has discussed a menu of items with us but there has been no proposal presented by the Senate," Stivers said in a written statement.

A few hours later, Gov. Steve Beshear issued a statement confirming that he has proposed ideas to House and Senate leaders for funding an overhaul of the state pension system.

"I have presented funding options to both House and Senate leadership, and have asked them to respond to those ideas," Beshear said. "They are my ideas, not anyone else's."

Beshear provided no further detail about his ideas for finding money to stabilize the ailing pension plan, which covers nearly 325,000 people and has a $33 billion unfunded liability.

Overhauling the pension plan is one of the biggest unresolved issues in this year's legislative session. Lawmakers will return to Frankfort on Monday and Tuesday to wrap up this year's session.

The Democratic governor and lawmakers hope to resolve the public pension issue next week and avoid a special session later this year, which would cost taxpayers more than $60,000 a day.

The Senate has approved a public pension plan based on a report from a bipartisan task force last year. It would repeal cost-of-living adjustments and require full funding of the system by 2015. It also would establish a hybrid cash-balance retirement system for new hires that guarantees at least a 4 percent return.

The Senate did not adopt a funding plan, saying it would be better to address funding in next year's session when a new two-year state budget will be considered. More than $100 million in additional General Fund money will probably be needed to fund the system in fiscal year 2015.

The Democratic-led House approved a pension system similar to the current one but also presented a funding plan primarily based on using proceeds from gambling.

Asked Wednesday whether the Senate is now ready to consider funding pension reform, Beshear said, "We have not reached a final agreement on anything yet, but those discussions continue and I remain hopeful that by Monday or Tuesday, we will come to a positive resolution on those issues."

Jack Brammer: (502) 227-1198. Twitter: @BGPolitics. Blog: Bluegrasspolitics.bloginky.com.

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