Politics & Government

KY Supreme Court moves swiftly to hear pension suit after Bevin’s last-minute appeal

Attorney General Andy Beshear and Gov. Matt Bevin are locked in a court battle over a new state pension law.
Attorney General Andy Beshear and Gov. Matt Bevin are locked in a court battle over a new state pension law. File photos

Gov. Matt Bevin filed an appeal Friday asking the Kentucky Supreme Court to overturn a lower court’s ruling that struck down Kentucky’s new public pension law.

A few hours later, the state’s highest court agreed to hear the case on Sept. 20.

Bevin’s attorney, Steve Pitt, said in a news release that the Republican governor hopes for a quick decision.

“It is essential that Kentucky’s public servants receive a speedy and final resolution regarding the legality of pension reform legislation,” Pitt said, without noting that Friday was the last day Bevin could appeal the June ruling by Franklin Circuit Judge Philip Shepherd.

Pitt added: “Our pension system is already dangerously close to collapsing. Without the reforms in Senate Bill 151, the system will continue to decline and remain the worst funded in the nation. These are weighty issues that will impact every Kentuckian. They must be decided by our state’s highest court and not based on the highly suspect ruling of a single judge.”

Shepherd ruled that the Republican-led General Assembly violated the Kentucky Constitution when it passed a surprise pension bill only six hours after introducing the legislation. The move angered teachers across the state and thousands of them marched on the Capitol.

Attorney General Andy Beshear, a Democrat, challenged the law in court with the Kentucky Education Association and the Kentucky State Lodge Fraternal Order of Police.

“Gov. Bevin’s decision to wait until the last moment to appeal has continued to cause anxiety to our teachers, police officers, firefighters, social workers and public servants who deserve better,” Beshear said Friday. “Our public servants and their families deserve a quick and final decision that protects the retirements they were promised. We are requesting the case go directly to the Supreme Court of Kentucky and be argued as quickly as possible.”

In a two-page order, Supreme Court Chief Justice John D. Minton Jr., said the case would be transferred to the high court and set a hearing for 10 a.m. Sept. 20. Each side will get 20 minutes to make its arguments and must keep its initial written briefs to 100 pages, the order said.

The controversial law places teachers hired after Jan. 1, 2019, in a hybrid cash-balance plan, which is similar to a 401(k), rather than a traditional defined-benefits pension, and requires those teachers to work longer before becoming eligible for retirement. It also caps the amount of accrued sick leave teachers may convert toward retirement to the amount accrued as of Dec. 31, 2019.

State employees hired between 2003 and 2004 also are required to pay 1 percent more for health care.

Pitt said it is “imperative” that the Supreme Court “resolve the legislative process issues on which the circuit court based its decision, so that the General Assembly has every tool at its disposal to advance important legislative priorities.”

Republicans have noted that several other key laws were passed using the same expedited procedures that Shepherd ruled unconstitutional, raising questions about their validity if challenged in court.

Shepherd ruled June 20 that the legislature violated Section 46 of the Constitution in two ways.

First, he said it failed to give the bill three readings on three separate days in each chamber, as the Constitution requires. Lawmakers approved the pension bill on the 57th day of this year’s 60-day legislative session by gutting a bill dealing with sewer systems and replaced it with the pension language.

Shepherd said that action meant the five previous readings the bill had received were no longer valid.

Second, the judge said, the bill appropriates money, and therefore needed the support of a majority of all members in the House to pass. The bill was approved with only 49 votes, which is two shy of a constitutional majority in the 100-member chamber.

Shepherd did not consider whether the law violates the state’s “inviolable contract” with teachers and other public workers.

The governor’s lawyer said he is “confident that the Supreme Court will see that reforms in SB 151 are not only legal, but are necessary to save Kentucky’s public pensions for current and future retirees.”

Jim Carroll, with the advocacy group Kentucky Government Retirees, said his group is “shocked that the governor has released a statement claiming that Kentucky Retirement Systems will ‘collapse’ without the adoption of Senate Bill 151.”

“This assertion is in no way supported by actuarial analysis,” Carroll said. “We as stakeholders are appalled that scare tactics are being used as a pretext for attempting to make illegal pension benefit cuts.”

Ron Richmond, spokesman for Kentucky Public Pension Coalition, which represents active and retired Kentucky public employees, said “it is unfortunate that Gov. Bevin has decided to appeal the decision — wasting thousands of taxpayer dollars in the process.

“The legislature and the governor clearly violated the rules which were put in place to guarantee a fair debate and public input on each and every bill,” Richmond said.

Attorney General Andy Beshear celebrates Judge Phillip Shepherd's ruling that the Republican pension law is unconstitutional. Governor Matt Bevin is expected to appeal the ruling.