Pension reform bill unanimously clears Senate panel despite KRS concern
02/06/2013 03:01 PM
The bill aimed at stopping the financial hemorrhaging of the state employee pension system unanimously cleared a Senate committee Wednesday despite objections from the Kentucky Retirement Systems’ top official about deadlines in the bill.
The bill will be voted on by the full Senate Thursday. But it faces questions in the House, where Democratic leaders say they want to see a dedicated revenue source to increase the state funding into the Kentucky Retirement System.
SB2 , mirrors recommendations of the legislative Pubic Pension Task Force. Sen. Damon Thayer, R-Georgetown, co-chaired that committee and is sponsoring the bill.
The major components of the bill include sharply increasing the amount the state pays into the retirement fund to pay the state’s full obligation and changing the retirement benefit structure for future hires.
Thayer told the committee that the recommendations don’t go as far he would have liked. But, he said the bill still represented a bipartisan vehicle that could pass the Senate, though would likely be changed in the House.
House Speaker Greg Stumbo, speaking to reporters before the House convened at 2 p.m. Wednesday, reiterated his position that passing a bill that doesn’t outline where the extra money will come from would not be “true pension reform.”
Thayer said the interim task force could not come to an agreement on a way to fund the required payment, which by recent estimates would mean increasing the payments into the fund by another $300 million in fiscal year 2015 that begins July 1, 2014. He said the General Assembly would be doing enough by specifying the intent to fund the full actuarially required contribution. The fund currently owes $18 billion more to current and future retirees than the assets it has.
“That’s what the budget process is all about in 2014, Thayer said. “That is the primary reason the voters send us here – is every two years we are to decide the spending proprieties. And is my hope when we decide to tackle the budget next year we find a way to fully fund the ARC.”
Bill Thielen, the Executive Director for the Kentucky Retirement Systems, said his group was in favor of all of the recommendations of the pension reform bill with one exception: the deadline to move to a cash balance pension plan.
The Kentucky Retirement System handles the retirement benefits and health care of county, city and state employees and some quasi-governmental groups, as well as the state police.
Thielen said his agency just could not make that deadline because of technical systems changes that would have to be made.
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