FRANKFORT — Fifteen Republican candidates for the Kentucky House and Senate called Wednesday for replacing the current pension plan for state lawmakers with a defined contribution plan like a 401k program.
The change from the current defined benefit plan would start with all new members eligible for legislative pensions, beginning with the class of 2013, said Brian Linder of Dry Ridge, who is in a race with Democrat Wanda Crupper Hammons of Dry Ridge for the House seat in the 61st District.
He also said all current state lawmakers would have the option to enroll in the 401k-style plan instead of getting direct benefits for legislative pensions.
During a news conference in the Capitol Rotunda, Linder and Chris McDaniel of Taylor, who is in a contest with Democrat James Noll of Villa Hills in the Senate's 23rd District, said the GOP plan would be the first piece of legislation the GOP freshmen would present during the 2013 General Assembly.
Never miss a local story.
They said the plan would be portable to other places of employment, would allow roll-in contributions from other 401k plans from previous employers and be subject to all IRS regulations.
It also would end retiree health care as an option for legislative service.
"We believe this action, while a small step, is an important one toward eliminating the most predictable crisis in Kentucky's history," McDaniel said.
He said the pension change could save millions of dollars, depending on the level of participation.
Asked why part-time legislators needed a pension, Linder said, "That's an excellent question. We have to take small steps to get where we are going."
McDaniel and Linder said a majority of GOP candidates for the General Assembly supported the proposed legislation.
State Rep. David Floyd, R-Bardstown, recently drafted a bill that contains the opt-out provision for incumbent lawmakers while ending pensions for all future lawmakers.
The debate over pensions has become heated in Frankfort because of a shortfall that, by some estimates, could be as much as $30 billion in retirement plans covering lawmakers, teachers, judges, police officers and other state and local government workers.
Kelly Whitaker, a Democrat who is running for the 2nd House District in Western Kentucky, said in a statement that the plan offered by Republicans is "nothing more than a cynical attempt to replace the gold-plated pension plan for current legislators with a silver-plated version for new legislators."
She said she proposed nine months ago a plan that would provide no full-time pensions for part-time legislators.