Attorney General Andy Beshear said Wednesday that changes in Gov. Matt Bevin’s proposed public pension bill dealing with the cost-of-living adjustment formula violate state law.
In a four-page opinion requested by state Rep. James Kay, D-Versailles, Beshear said the changes violate the state law that establishes the so-called “inviolable contract” between the state and public school teachers.
The inviolable contract, say public employees and retirees, guarantees they will get the retirement benefits promised to them when they were hired.
Kay specifically asked Beshear if legislators could vote to approve the portion of Bevin’s plan that suspends the 1.5 percent cost-of-living allowance mandated by law for current retired teachers for the next five years beginning July 1, 2018, and suspends the rights of future retired teachers to that allowance for the first five five years of their retirement.
Bevin’s director of communications, Amanda Stamper, said in an email, “The opinion fails to analyze any case law, making it look like it was written by a first-year law student. Attorney General Andy Beshear is wrong yet again.
“COLA freezes are common in pension reform proposals and have been upheld in courts. The Bevin Administration and leaders in the General Assembly are working diligently to save the state’s failing pension systems, which became the worst funded systems in the country under Steve Beshear’s 8-year term as governor.”
Andy Beshear is the son of former Democratic Gov. Beshear.
Tim Abrams, executive director of the Kentucky Retired Teachers Association, said in a statement that Beshear’s opinion “confirms what the KRTA and others have argued for months.
“This opinion is further evidence that the Gov. Matt Bevin administration and members of the Kentucky General Assembly still don’t have a legal, workable, fair, and acceptable pension reform plan.
“As our members used to tell their students when they gave the wrong answer in class, it’s back to the drawing board.”
Abrams also said the KRTA thanks Kay “for having the courage and initiative to seek this important and far-reaching opinion.”
Bevin had planned to call a special legislative session this calendar year to address the state’s financially strapped public pension systems but it appears now lawmakers won’t tackle the issue until the 2018 General Assembly, which begins Jan. 2.