A bill that would divide Kentucky’s ailing pension systems was put on hold Thursday but will be considered again during an expected special law-making session later this year to deal with tax reform and pension funding, Gov. Matt Bevin said Thursday.
“The most critical thing is to make sure we get this right,” Bevin said in a news conference with the bill’s sponsor, state Sen. Joe Bowen, R-Owensboro. “There are people depending on us.”
Senate Bill 226 would remove the County Employees Retirement System, which covers about 230,000 local government employees, from the Kentucky Retirement Systems, which also oversees separate pension funds for state workers. CERS would become an independent agency controlled by its own nine-member board.
CERS has 59 percent of the money it is projected to need to fulfill its future pension obligations, compared to 19 percent for the Kentucky Employees Retirement System, which covers about 130,000 state workers and retirees.
Sign Up and Save
Get six months of free digital access to the Lexington Herald-Leader
Officials with Kentucky Retirement Systems have said there is no reason to spin off CERS because its funds are separately managed. They questioned how much additional money would be needed to operate a separate agency with its own staff.
Bevin said the bill “had merit,” but the state needs to complete an ongoing audit of the pension systems before any changes are made. He also complimented Bowen on the bill.
Bowen said he supports the governor’s efforts to shore up the state’s pension systems and acknowledged that his bill might have been “run over” if he continued to push it in the legislative session that ends later this month.
“I’m not abandoning you,” Bowen said, addressing members of the county pension system. “I’m supporting you. And the way I’m supporting you is giving this bill more time.”
Bevin said the bill will be a priority during the special session he plans to call. He has not yet said when that will happen.