Politics & Government

Lawmakers ‘highly unlikely’ to repeal cost-of-living adjustments for retirees

It's 'highly unlikely' lawmakers will touch retirees' COLAs, Hoover says

Senate President Robert Stivers and House Speaker Jeff Hoover respond Wednesday, Sept. 6, 2017, to a question about the fate of a recommendation to cut retirees' cost-of-living adjustments in tackling public pension reform.
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Senate President Robert Stivers and House Speaker Jeff Hoover respond Wednesday, Sept. 6, 2017, to a question about the fate of a recommendation to cut retirees' cost-of-living adjustments in tackling public pension reform.

House Speaker Jeff Hoover said it’s “highly unlikely” that lawmakers will take away the cost-of-living adjustments previously given to retirees as the General Assembly overhauls Kentucky’s pension systems for public workers.

“It’s highly unlikely that is going to take place,” Hoover, R-Jamestown, told reporters Wednesday after a meeting of legislative leaders.

A consultant hired by the Bevin administration to study Kentucky’s financially ailing pension plans recommended changes last week that would save the state more than $1 billion a year. The most controversial of those proposals was eliminating the cost-of-living adjustments that state and local government retirees received between 1996 and 2012, a move that could reduce, by 25 percent or more, the monthly checks of those who retired before 2012.

That recommendation and several others made by PFM Consulting Group to the Public Pension Oversight Board sparked widespread backlash from many government workers and retirees, putting intense political pressure on legislative leaders as they attempt to craft legislation that could win approval in a possible special legislative session later this year to deal with the state’s pension crisis.

Asked what he thought about the the consultant’s recommendation to roll back cost-of-living adjustments, Senate President Robert Stivers, R-Manchester, made clear that lawmakers aren’t bound by PFM’s recommendation.

“They do not have a seat that I know, and as I said earlier, in any one of the 138 seats (in the legislature),” Stivers said.

He said there are some recommendations in the consultant’s report that will “not see the light of day,” but he declined to identify them.

Hoover wouldn’t promise that lawmakers won’t cut any retiree benefits. “Everything is a work in progress, and I’m not going to comment on any specifics until we move farther down the road,” he said.

Jim Carroll, a spokesman for the Kentucky Government Retirees advocacy group, said Hoover’s comments about cost-of-living adjustments are welcome news.

“We thank Speaker Hoover for his leadership on pension matters and appreciate his comments,” Carroll said. “We believe that a clawback of COLAs is manifestly unfair and unwise. We look forward to a robust discussion of revenue measures that should be considered to help address the state’s needs, including adequate funding for pensions.”

Hoover said lawmakers continue to meet on pension reform, and that “it seems like every meeting produces more questions.”

Once leaders reach consensus on a framework for pension reform, a bill will be drafted, Hoover said. That process could take four weeks, he said.

Gov. Matt Bevin, a Republican, has said he will call a special session this year to overhaul the state’s pension systems, but time is dwindling. Lawmakers return to Frankfort in early January for a regular session. Only the governor can call a special session and set its agenda.

Neither Hoover nor Stivers would provide a timetable for when a special session might be held. Both leaders said they have heard no discussion of expanded gambling being used to solve the pension crisis.

Both leaders also said they would prefer to handle a pension overhaul in a special session rather than during the regular 60-workday session in 2018.

Jack Brammer: 502-227-1198, @BGPolitics

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