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January 29, 2018

 FRANKFORT, Ky. — The first four weeks of the 2018 legislative session have come and gone, and the bill that is far and away the top priority of Republicans who hold all the power in Frankfort — pension reform — has yet to be filed.

And don’t expect the bill to be filed before 4 p.m. Tuesday — the deadline for candidates to file for elections to the General Assembly this year. After that deadline passes, Republican leaders will have a clearer idea of how many of their members might vote for a bill that may be unpopular with public employees and retirees.

Asked on Friday if the bill would be filed before the filing deadline, Senate Majority Leader Damon Thayer said he had not seen a final draft of the bill being privately negotiated by Republican leaders of the two chambers. “So I would say no, it’s not” going to be filed by Tuesday.

Thayer, a Georgetown Republican, said the bill could be filed this week. But House Majority Leader Jonathan Shell, R-Lancaster, indicated the wait might be a bit longer.

“What we’re trying to do right now is take a data-driven approach – getting information from the retirement systems – in order to try to compile a bill that we will hopefully present within the next week to three weeks,” Shell said.

What leaders of the House and Senate Republican majorities are trying to do is produce a significant pension reform bill that can still Republicans shunned a proposal released in October by Gov. Matt Bevin and GOP leaders that included deep cuts in benefits and called for a gradual shift from traditional pension plans with defined benefits to 401(k)-style retirement plans.Republicans shunned a proposal released in October by Gov. Matt Bevin and GOP leaders that included deep cuts in benefits and called for a gradual shift from traditional pension plans with defined benefits to 401(k)-style retirement plans.win enough votes to pass, particularly in the House where most Republicans shunned a proposal released in October by Gov. Matt Bevin and GOP leaders that included deep cuts in benefits and called for a gradual shift from traditional pension plans with defined benefits to 401(k)-style retirement plans.

Bevin unsuccessfully pushed lawmakers to reach agreement on a revised bill that would pass at a special session late last year. Then Republican leaders said they hoped a revised bill would be passed in the first days of the regular session.

But since the session began, the Republican leaders of the two chambers have been negotiating and drafting a bill. Part of that process has been to ask the retirement systems for “scores,” or reports of their actuaries on the impact various options under consideration would have on the state budget and the finances of the retirement plans.

These negotiations have involved only the GOP leaders who say they’ve been consulting with Bevin. Even the co-chairmen of the Public Pension Oversight Board, Rep. Jerry Miller, R-Louisville, and Sen. Joe Bowen, R-Owensboro, say they’ve not been involved.

Democrats say they’ve been kept in the dark, and some say the bill is being held back until after Tuesday’s filing deadline. “The issue has been put on the back burner and people’s re-elections have become more important than filing the bill or talking about it before the filing deadline,” said Rep. James Kay, D-Versailles.

Shell said that’s not so. He said leaders are being careful to understand the impact of the bill on public employees and retirees — and on the state budget — before they unveil it.

“What we learned is if we put out things prematurely without having the data — without having somewhat of an understanding of what we’re actually going to try to put into a bill — (it) causes undue unrest to state employees,” Shell said.

And Shell said, “It’s not about the votes we have to get. It’s about trying to do the right thing — coming up with a data-driven solution that fixes this problem as much as we possibly can over the long term,” he said.

Said Thayer, “We’re trying to clean up the mess created by decades and decades of Democratic dominance in this state, and it’s not going to happen overnight.”

This month Thayer revealed some details on how the revised bill will be different than the proposal unveiled in October.

The proposal for all teachers and public employees to pay 3 percent of their salaries for retiree health benefits will be reduced. “It’s not down to zero, but it’s not at 3 percent,” Thayer said.

The proposal to suspend cost-of-living adjustments in teacher retirement benefits “is still in play in some form. … There are options on the table that would include a smaller COLA spread out over a number of years, or a COLA every other year,” Thayer said.

The suspending of pension payments to retirees who are re-hired in government jobs is also likely to be out of the revised bill, he said.

And Thayer said dropped from the bill is the proposal to move public employees with at least 27 years of service into 401(k)-like savings plans. But new hires, he said, will “most likely” be moved into a 401(k)-like plan, Thayer said. “That’s what I favor.”

Thayer said he expects the bill will require a new funding approach for the Teachers’ Retirement System called “level dollar” funding – a move that a legislative staff report said would require nearly $400 million more in state contributions each year to the teachers’ plan. Asked if the bill would add that cost to an already strained 2018-20 state budget or somehow delay it or phase it in, Thayer said, “To be determined.”

Thayer, who preferred the proposal unveiled last fall, said, “I believe there will be a pension bill. I hope it will be significant enough to do some good.”

By Tom Loftus
Louisville Courier Journal

Comments  

+1 #1 Voter in Ky 2018-01-29 23:11
Repeat after me, they are involving state employees in their politics.
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