Covington mayor says pension proposal leaves more questions than answers

10/18/2017 04:58 PM

COVINGTON — Reaction to Gov. Bevin and Senate and House leadership’s proposal to solve the pension crisis has been swift with many saying that they have more questions now that a plan has been introduced.

Former State Senator and current Covington Mayor Joe Meyer says that there’s one big issue not clearly addressed with the current plan.

“The plan as it was laid out, absolutely fails to deal with the unfunded liability that’s in the KERS system,” Meyer said. “Switching future employees to a defined contribution plan does not put any money into the existing retirement system. As a matter of fact, it takes future money away from the retirement system and putting it into the DC plan.”

Meyer cites examples in other states which made the switch from a defined benefit program to a 401 (k) style plan with poor results.

“In 1991, West Virginia teachers went from a defined benefit program to a defined contribution program, and 20 years later, the average West Virginia teacher had thirty three thousand dollars in his or her retirement plan,” Meyer said. “Folks recognized in this case that teachers did not have the knowledge or the skill to manage their 401 (k) effectively enough to provide for an appropriate retirement.”

Meyer is also concerned about the increased costs of pension contributions that cities would have to make under the plan, which could take money away from needed services and force tax increases.

“In Covington’s case, the lowest estimates so far is an estimated 2.6 million dollars a year, and if we use some of the higher estimates on what the costs could be, it’s well over $3 million a year,” Meyer said.

While the governor and Republican leaders have said swift action needs to be taken now to address the crisis, Meyer warns that sometimes quick action without enough thought and discussion, could have dire consequences.

“If this is right, let’s air it out, full light of day, put all the plan out there, all of its details, let the public understand it, let the employees understand it, let us local government employers understand it,” Meyer said. “That way, we can do a better job identifying the problems that we’re going to have because of the approach, and we can also do a better job of recommending fixes.”


Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.