Andy Beshear will allow Rocky Adkins and other ex-lawmakers to inflate their pensions
Gov. Andy Beshear will allow former House Minority Leader Rocky Adkins and at least one other former lawmaker to inflate their legislative pensions as they accept high-level positions in his administration.
Beshear, a Democrat, will rescind an executive order issued by former Gov. Matt Bevin during his last week in office that was aimed at preventing “pension spiking,” which allows a lawmaker to accept a higher-paid position in another branch of state government and then apply that salary to their years of part-time service in the legislature. The maneuver sometimes pads a person’s pension by tens of thousands of dollars a year.
The executive order matched a Bevin Administration policy that required former lawmakers to retire and start collecting their legislative pensions before taking a position in the administration. Bevin’s executive order attempted to codify that policy, but Beshear contends it is illegal.
“I believe that the executive order is unlawful, I believe it was mean-spirited and it’s trying to prevent something that someone simply running and winning county judge or a judicial post could otherwise qualify for,” Beshear said.
The move will allow Adkins, D-Sandy Hook, and former Rep. Dennis Keene, D-Wilder, to significantly boost the amount they will eventually receive from the Legislative Retirement System. A third former lawmaker who has joined the Beshear administration, former Sen. Dorsey Ridley, D-Henderson, has already retired and tapped into his legislative pension.
Donna Early, executive director of the Judicial Form Retirement System, which manages the legislative pension system, said she thinks Bevin’s executive order contradicts current law, which allows lawmakers to apply their other government salaries to their legislative pensions.
“I believe that the statutes would be controlling over an executive order,” Early said.
Beshear said the executive order “restricts what is otherwise a legal right under statute.” He said preventing the practice of pension spiking was up to the legislature.
While issuing the executive order, Bevin took a direct swipe at Adkins, the longtime Democratic representative who Beshear named his senior adviser.
“It is outrageous that legislators like Adkins ... are now attempting to enrich their own pensions by accepting high-paying positions in the Beshear Administration,” Bevin wrote. “I’m asking Leader Adkins to retire from the General Assembly prior to his appointment in the executive branch so that his higher salary is not included in his final pension calculation.”
Adkins will not be taking Bevin’s advice.
“Rocky looks forward to his new role as senior advisor to Gov. Beshear,” said Crystal Staley, Beshear’s communications director. “He has no plans of retiring and will follow current state retirement laws.”
Bevin noted that Adkins voted for a bill in 2005 that allowed lawmakers to pad their pensions by taking other government jobs, and against a bill that would have ended the practice.
Beshear has not said how much he will pay Adkins, but such positions generally pay more than $100,000. That salary would significantly boost the $47,000-a-year pension he is now entitled to claim based on his more than 30 years in the House, including many as a member of the Democratic leadership team.
The Legislative Retirement System uses a formula that uses the number of years a lawmaker has served in office, their three highest salaries, and a 2.75 percent service credit rate to calculate to calculate an individual’s annual pension payment.
As a legislator, Adkins salary was $225.62 per day, plus a daily allowance for expenses when the legislature was in session or he was authorized to work in Frankfort. His pay rarely exceed $30,000 a year.
In a news release announcing his executive order, Bevin said he wanted to curb the practice of pension spiking because it was unfair to other participants in Kentucky’s retirement system, which currently has $25.8 billion in unfunded liabilities.
“Our pension system is already the worst funded in the nation, and it is both actuarially unsound and fundamentally unfair that a select group of individuals can enrich their own pensions and receive millions of dollars more in benefits than they have paid in,” Bevin said. “We ended this practice in our administration, and it is in the best interest of the taxpayers, public employees, and the long-term health of the pension system that it is ended once and for all.”
Adkins’ pension, though, wouldn’t come out of the poorly funded Kentucky Retirement Systems. Instead, it is funded by the legislative retirement system, which is 99.3 percent funded.
Early was reluctant to say Adkins will definitely collect more by taking a job in the Beshear Administration, noting that the pension system won’t have to pay anything out during the years he works for Beshear.
“The pension he forfeits for eight years could offset the benefit he receives,” Early said. “Spiking takes place from year to year.”
Keene’s appointment was announced Monday. He’s currently eligible for $23,000 a year in pension payments from his legislative account.
Even if the pensions of Keene and Adkins pensions grow significantly, they still won’t rival the bloated payment received by Harry Moberly, a former lawmaker turned Eastern Kentucky University vice president who collects $154,912 in annual pension benefits.
Moberly benefited from a high university salary, but also from a higher service credit rate, which was 4.15 when he was first elected to the legislature. That service credit rate was dropped to 2.75 in 1982.
“Even if it is enhanced, it will never be like those that are in the public eye right now,” Early said.
This story was originally published December 16, 2019 at 2:23 PM.
