Op-Ed

AG Andy Beshear’s lawsuit threatens future of Kentucky teachers’ pensions

Attorney General Andy Beshear is getting plenty of practice for his next campaign as he travels across the commonwealth to spread fear and misinformation about the new pension reform bill, designed to save Kentucky’s public pension system.

His most dangerous lies are those of omission. Beshear doesn’t want Kentuckians to know about the positive things Senate Bill 151 does to help ensure public pensions remain viable. For example, the law:

▪ Stops the practice of underfunding Kentucky Teachers Retirement System by requiring future governors and legislators to make the full actuarially required payments. This is in stark contrast to the old funding formula that allowed former Gov. Steve Beshear to fund only 40 percent of TRS’ request. His dereliction allowed Kentucky’s public pensions to become one of the worst-funded plans in America.

▪ Establishes a pathway for ensuring the unfunded liability will be paid off through a new funding formula called “level dollar funding.” Beginning July 1, 2020, this will result in annual contributions of $400 million more than the record $1.2 billion annually that Gov. Matt Bevin and the Republicans in the General Assembly placed in the state budget for TRS in the upcoming biennium.

▪ Does not violate the inviolable contract of a single current or retired teacher, according to the testimony of the executive director of TRS. AG Beshear has effectively conceded this point in his lawsuit against the bill.

▪ Makes zero changes for retired teachers and changes so minimal to current teachers that Beshear has not directly challenged them in his lawsuit. In fact, it has less impact than a similar proposal supported by the Kentucky Education Association and the Kentucky Association of School Superintendents.

▪ Provides a better benefit under the new hybrid cash balance plan for new teachers than the current system. The teachers union’s own actuary admitted that “long service teachers may receive stronger benefits from the new CB [cash balance] plan.”

It is unfortunate that these facts seldom appear in Frankfort media coverage and are nowhere to be seen in most social-media discussions. But, it is no surprise that you haven’t heard this information from the attorney general. After all, the facts demonstrate that SB 151 will strengthen our pension system and promote its solvency for future generations.

If the lawsuit against SB 151 is successful, however, the opposite will be true. Without reform, every public employee in the state will be harmed, and irreparable damage will be done to countless others through an argument made in the lawsuit, which calls into question many of Kentucky’s most important laws.

The lawsuit argues that SB 151 should be invalidated because of the process by which the General Assembly passed the bill. If the court rules in favor of this argument, it could invalidate thousands of other bills where the same process was used, including House Bill 362, which provided relief for Kentucky cities and counties by phasing in County Employees Retirement System pension contributions over a 10-year period.

If HB 362 is nullified, it could force cities and counties across our state into financial distress and possibly bankruptcy. Beshear’s arguments would also strike down House Bill 265, passed this year to allow struggling coal counties to keep more of their coal-severance dollars.

Those are just a few examples from the 2018 legislative session. There are decades of laws on the books passed using the same procedure as SB 151. Does Beshear really want to open the floodgates and call into question bills like Senate Bill192, which his father signed into law in 2015 to battle the opioid crisis? Does he want to throw the doors of our jails open and release all of those who were arrested because of this law?

While the attorney general continues to champion a lawsuit that will create more problems and uncertainty for our state, there are a handful of people in Frankfort who truly want to fix the public pension crisis. Since day one, Bevin has passionately fought to fully fund the public pension system and ensure its sustainability. SB 151 is a significant step forward.

Judging by Andy Beshear’s behavior, one would think he doesn’t want this problem to get better.

Blake Brickman is chief of staff for Kentucky Gov. Matt Bevin.

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