FRANKFORT — Senate Republicans said Wednesday that they have enough votes to pass a sweeping overhaul of Kentucky's pension system for state and local government workers.
Senate Majority Leader Damon Thayer, R-Georgetown, said Senate Bill 2 will be filed on Tuesday and should win approval of the Senate within the first two weeks of February.
"A vote could take place late in the first week or early in the second week," Thayer said.
The bill will contain the recommendations of a task force charged with providing solutions to fix Kentucky's ailing pension system, Thayer said.
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Overall, the $11 billion Kentucky Retirement Systems has only 44 percent of the money it needs to meet future obligations to state workers, local government employees and state police.
Some of the recommendations the task force has proposed include trimming retirement benefits and repealing a law requiring annual cost-of-living adjustments for pensioners.
Instead of providing pensions based on a worker's highest salary years, new state employees would enroll in a "hybrid cash-balance plan" that guaranteed them at least a 4 percent return on money they set aside over their careers. It would operate much like a private-sector 401(k) account, but with some protection.
Thayer and Senate leaders said Wednesday that many Republicans in the Senate would like to see more tweaks to the pension system but realize that the task force's recommendations are what are most likely to pass the Republican-led Senate and the Democratic-led House.
A key sticking point is where additional money will come from to fully fund the state's contribution to the plan, which it has consistently underfunded over time.
Thayer said Wednesday that there will be language in SB 2 that says the state must fully fund its contribution beginning in 2014. To do that, the state would have to come up with an additional $327 million in fiscal year 2015, which begins July 1, 2014. In subsequent years, the required payment would continue to grow by hundreds of millions of dollars.
House Speaker Greg Stumbo, D-Prestonsburg, has said he believes the legislature should tackle the thorny of issue of how to pay for increased pension contributions in the current legislative session. Others want to put that discussion off until 2014, when the state tackles its two-year budget.
Stumbo has also said there should be a designated funding source for the increased pension payments.
Senate leaders said Wednesday that Kentucky can't wait any longer to fix its pension woes.
"Let's stop the bleeding right now. Let's get the fix in place," said Senate President Robert Stivers, R-Manchester. "Then we go into the context of the whole budget in 2014, then we can start making the necessary contributions to fill that hole in."
Stivers and Thayer spoke to the media Tuesday after the 38-member Senate was briefed on the task force's recommendations behind closed doors.