Athens, Greece has riots as public pensions are cut. To get votes, politicians gave out more than was put into the pension system.
Athens, Kentucky could see riots as citizens across the commonwealth face the same problem. Our public pension funds are $30 billion-plus under water.
When Greece tried to sell bonds to continue the pensions, the size of the debt became known and smart Greeks and business owners sold their property and moved out. That left a collapsed housing market and economy.
It is rumored some Kentucky legislators want to float bonds to get rid of our pension debt. To get anyone to buy the bonds, the real numbers must be disclosed and then our smart citizens could sell and move out. Kentucky doesn't have enough people to pay off the principal and interest on $30 billion.
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Like in Greece, Kentucky's pension funds are insolvent because of legislators' abuse, giving away more than was paid into the system.
"Spiking," allows a participant's take-out to be based upon their highest three years' salary, regardless of what they paid in. That's how you bankrupt a pension fund.
Another abuse allows participants to buy five qualifying years for a nominal fee. We have participants retiring in their early forties. Combined with spiking, this leads to the double and triple-dippers in the system.
Legislators gave public employees these things to get their votes, then voted themselves pensions and are now using spiking and buying years to rob the pension funds. When legislators passed a small pension, some were thrown out of office, but the ones left were emboldened to go for more.
If you have ever been on a farm, you know hogs will not eat from a small bucket if they can get to a full trough. In 2005, the legislators went whole hog with a law making their part-time years count as full-time for pensions at the spiked rate. If they could get a high-paying state job for just three years, they could retire rich.
Let's call their 2005 law what it is: stealing. There are no clean hands. Both Republican and Democrat legislators crossed the aisle to get to the trough.
I like Steve Beshear, but Gov. Beshear has used the 2005 law to get rid of three Republican senators by giving each a state job paying more than $124,000. After only three years on the job, they can retire.
With normal life expectancy, each could take out more than $3 million. They will pay in little and deserve nothing. But with cost-of-living increases, the three could take out more than $10 million.
Legislators alone are responsible for public pension debt and abuse. They cannot fix it because they profit from it.
We have one option. The Kentucky Supreme Court is elected. The final body to hear a class-action lawsuit and declare the pension funds insolvent and perhaps the legislators' abuse unconstitutional is the seven-member court.
Over the next three years, six of the seven seats on the court will be elected. We need a careful, statewide plan to find legal candidates who disagree with the legislators' actions.
Putting the Kentucky pension funds into the hands of court-appointed, professional receivers we can weed out the abuse and assure a strong pension system pays our public employees every penny they deserve.
Any years legislators failed to budget enough state money into the funds, we will have to make up. That's fair.
On Tuesday, we need to vote against every incumbent state legislator. That is the only message career politicians understand. The newly elected legislators will get the message and vote to repeal the laws that gave part-time legislators pensions.
Next election, we do the same. Our public employees, betrayed by the legislators, should vote accordingly.
We can have fair pension reform and make the massive debt small for our children and grandchildren. Let's throw out the people who did this to us before they float bonds and start a Greek tragedy here.