Ky. Chamber of Commerce hoping to see new government hires moved to 401(k)-style pensions in reform effort

08/30/2017 01:04 PM

The Kentucky Chamber of Commerce has been one of the biggest spenders when lobbying the General Assembly, and that trend will likely continue as lawmakers consider reforming the state’s pension systems in a special session later this year.

The state Chamber has been talking about Kentucky’s pensions for 10 years, and Communications Director Jacqueline Pitts says the PFM Group’s recommended changes to retirement plans offered to government employees “shows that there is a huge problem.”

She noted that Gov. Matt Bevin and legislators still need to craft a proposal to grapple with unfunded pension liabilities ranging in estimates from $37 billion to $64 billion, a process during which the Chamber plans to make its perspective known.

“I’m sure a lot of people wonder why the Chamber is so vocal on this issue, and that is because it affects everyone in the state, especially the business community who pays a large percent of the taxes,” Pitts said during an in-studio interview with Pure Politics, noting that the group wants to see structural changes for government pensions coupled with additional funding.

“And we can’t really attract great businesses without dealing with this problem because it impacts everything that has to do with our commonwealth.”

Pitts said the Chamber hopes to see future government workers moved to a 401(k)-style plan, which the PFM Group recommended for those in the Kentucky Employees Retirement System and County Employees Retirement System non-hazardous pensions, the Judicial Form Retirement System and the Kentucky Teachers Retirement System, with future teachers also enrolled in Social Security.

Pitts said the Chamber hasn’t advocated for giving future teachers defined-contribution-style pensions, however, saying the group questions the cost of transitioning them into Social Security.

“Budget Director John Chilton seemed pretty confident that we could put new hires in it, but because of the transition costs and things like that we’ve not really advocated for that up to this point,” she said.

“We also haven’t had a position on moving anybody current into any different type of system. Obviously there’s a lot of discussion about that now after yesterday, but up until yesterday there wasn’t a lot of talk of touching current employees, so we don’t really have a lot of positions on that, but we would like to make sure that things are, as (House Speaker) Jeff Hoover said yesterday too, meeting our legal obligations is important in this discussion.”

Find out more about what Pitts had to say about potential legal challenges to the inviolable contract, tax reform and the Kentucky Chamber of Commerce’s recognition as the national Chamber of the year in the interview:


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