Gov. Matt Bevin and legislative leadership unveiled a plan Wednesday that will drastically alter retirement benefits for future state and local employees. But what does it mean for state workers and retirees already covered by pensions?
Here are seven highlights of the proposal that have a direct impact on current and retired state and local government employees who are enrolled in non-hazardous pension plans:
▪ The retirement age doesn’t change and current retirees will keep their previously granted cost-of-living adjustments.
▪ Employees must contribute an additional 3 percent of their salaries for retiree health care benefits.
▪ Anyone who started work since Jan. 1, 2014 will be rolled into a defined-contribution 401(K)-style plan.
▪ Employees hired before Jan. 1, 2014 can keep their pension plan until they have worked for 27 years or reach the age of 65. After that, they’ll start getting into a 401(K)-style plan.
▪ Sick leave credit will no longer be used to calculate retirement eligibility after July 1, 2018.
▪ Any of the highest five salaries used to calculate retirement benefits must include a full 60 months of service. (This is to prevent spiking of retirement benefits).
▪ All current and future employees must suspend their pension to accept a full-time position in the public sector for as long as they hold the new job.
None of the proposed changes would go into effect until July 1, 2018.