Legislative leaders say changes on the horizon for pension reform bill ahead of special session

11/01/2017 04:40 PM

FRANKFORT — Legislative leaders are still working through the details of the pension reform bill released on Friday, and House Speaker Jeff Hoover says members of his caucus will meet again at the end of the week after some expressed concerns with certain provisions of the draft proposal.

Hoover, R-Jamestown, says the largest misgivings expressed during a House GOP caucus meeting Tuesday dealt with provisions on government workers paying an additional 3 percent of their pay to cover retiree health insurance and reemployment in the public sector for retirees.

Under the bill, employees who fall into that category will still be required to pay pension contributions, but those would go directly toward the state’s unfunded liabilities, estimated at up to $64 billion, and not for their retirement benefits.

“We had a good discussion on all components of the plan quite honestly, but those seem to two of the bigger ones,” Hoover told reporters after a Legislative Research Commission meeting Wednesday, noting the House Republicans will meet again this Friday.

While House Republicans haven’t been polled on their support for the bill yet, Senate Majority Floor Leader Damon Thayer says the Senate’s GOP majority are on board with the pension reform proposal with some changes expected.

“We’ve got the votes to pass the bill, but I think that there are probably a couple of tweaks that can be made,” said Thayer, R-Georgetown. “The speaker’s identified those, and I would agree those two areas are the ones that we’re looking at.”

“Once you put out a 500-page bill and people start taking a look at it, there are going to be questions,” he added. “… We’ve got to decide how far we’re willing to go. I think people need to remember that if we don’t pass this pension bill or something very close to this plan that is out there right now, there’re going to be some really tough votes coming up in the next session. We’re looking at double-digit cuts across the board in government if we don’t pass this bill.”

Asked about Thayer’s confidence in the Senate, where Republicans hold a 27-11 supermajority, Hoover, who leads a 64-36 supermajority in the lower chamber, said, “God bless them. We’re still working on it.”

Thayer says another issue on death benefits for police officers in the non-hazardous pension plans will be fixed, a problem that he chalked up to a drafting error in the bill.

Exactly when Gov. Matt Bevin will call the General Assembly back to Frankfort for a special session remains to be seen, as does the length of that session.

It takes at least five days to pass legislation, and Hoover says his caucus wants adequate time to review the final product.

“Our caucus has made it really clear in very strong terms, they want a vetting of this bill more than just one meeting, so however we can accommodate those concerns, hopefully we can do that before the special session,” Hoover said.

“If we can accommodate those concerns before the special session, then I think we can do it in five days.”

Thayer says it’s possible that the special session, which costs about $60,000 per day, lasts longer than the minimum five days.

“As long as everybody’s on the same page about any tweaks that are made and there’s agreement that we can then communicate to our caucus and they can communicate to theirs, brevity of session should not be a problem,” Thayer said. “But $60,000 a day to solve a $65 billion problem is a pretty good investment for the taxpayers.”

Thayer says a special session could come as late as the last week of December and that he’s advised members of his caucus to keep their travel plans clear between Thanksgiving and Christmas.

In the meantime, a number of town halls have been held and scheduled throughout the state, with public workers and teachers filling meeting spaces in the days before and since the proposal’s release.

The outcry of the proposal, which would cap benefits in the traditional pension plan after 27 years and move most new government workers to defined-contribution retirement plans, didn’t catch Hoover off guard.

“I expected there would be a lot of engagement, a lot of involvement, and I welcome that,” Hoover said. “This affects a lot of people.”

“We’re listening, and we’re trying to address some of the concerns,” he added. “I don’t like the rhetoric and the misinformation, but that probably comes with the territory.”

State Budget Director John Chilton is scheduled to give an overview of the proposal, which calls for defined-benefit pensions to be capped after 27 years of service for most state workers and transitions new public-sector workers into defined-contribution retirement accounts, to the Public Pension Oversight Board on Thursday.

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