Politics & Government

What will state pension changes look like? Retiree groups wait, worry.

'We're extremely concerned.' Pension proposals draw fire from retirees, teachers.

Jim Carroll, with Kentucky Government Retirees, and Kentucky Education Association President Stephanie Winkler voice concern about proposed changes to Kentucky's public pension plans on Monday, August 28, 2017.
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Jim Carroll, with Kentucky Government Retirees, and Kentucky Education Association President Stephanie Winkler voice concern about proposed changes to Kentucky's public pension plans on Monday, August 28, 2017.

Speculation that Republicans will finally announce their proposed framework for pension reform has echoed through the walls of the Capitol this week. So far it hasn’t happened.

Meanwhile, retiree groups think they have an idea of what’s coming — a 401(K)-style plan.

In a detailed post on Facebook, Alan McDonald, the publicity chair for Kentucky Public Retirees north central chapter, wrote out a list of the expected changes to the pension system.

House Speaker Jeff Hoover, R-Jamestown, would not confirm if the Facebook post accurately captured what is being discussed in meetings on pension reform.

Gov. Matt Bevin and Senate President Robert Stivers, R-Manchester, did not respond to requests for comment.

When asked how accurate he thought the list was, Larry Totten, the President of Kentucky Public Retirees, was fairly confident.

“Considering that it’s taking so long to hammer out something, I’ve got it at about 75 percent,” Totten said.

The biggest changes highlighted on the retiree Facebook page centered around how future and some current employees would receive their retirement benefits.

In particular, state employees and teachers would see their pension capped after 27 years of service and they would be put into a 401(K)-style plan if they continued to work. Since teachers currently don’t pay into Social Security, local school boards would be required to pay the local match into Social Security for all teachers who work past 27 years.

New employees would be put into a 401(K)-style plan, with the exception of state and local employees who perform “hazardous” jobs, as would employees hired after 2013. Employees hired before 2013 would be given the option to switch to a 401(K)-style plan.

Retirees would be required to pay 3 percent more for their health insurance, but the proposal would not claw back cost-of-living adjustments they had already received or raise the retirement age, the group said.

“Although this bird’s-eye view of the bill should be released this week, there are still many fine details yet to be settled,” McDonald wrote. “In short, there is still no final version of the bill.”

Jim Carroll, the president of Kentucky Government Retirees, confirmed that he had heard similar proposed changes, but said he had only heard it from one lobbying group and had not been able to get it confirmed.

Carroll said his group is concerned with ideas to move current employees to a 401(K) plan. He said setting a 27-year cap on pension benefits could potentially violate the contract between pensioners and the state government.

“We believe that would violate our rights because it would arbitrarily set a limit on how much you can participate,” Carroll said.

Totten agreed that a 27-year cap could spur a legal challenge.

The speculation matches the changes Bevin has expressed he’d like to see in pension reform, namely that it establishes a 401(K)-style plan.

And while Bevin has offered limited details about what he expects to see, Republican leadership in the House and Senate have remained tight-lipped about the ongoing discussions.

“I made a commitment within that group that I would say nothing publicly and I intend to honor the commitment that I made and I will do that until we get to the point where we have something we can share publicly,” Hoover said in a news conference Tuesday.

House Speaker Jeff Hoover says new issues keep arising as Republicans meet to discuss pension reform on Tuesday, Oct. 10, 2017.

Daniel Desrochers: 502-875-3793, @drdesrochers, @BGPolitics

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