Pension reform to be SB 2 and will be filed in early Feb.; Funding could be sticking point

01/11/2013 05:00 PM

Senate Republicans are underscoring the importance of shoring up the public pension system by designating the reform bill as Senate Bill 2. And the bill’s sponsor, Sen. Damon Thayer, has pledged to move the bill quickly when legislators return to Frankfort Feb. 5.

Thayer, the Senate Republican floor leader, co-chaired the task force that looked into ways to stabilize the finances of the Kentucky Retirement System, which oversees retirement for city, county and state workers and state police. The group suggested changing the benefits for future hire to individual investment accounts that guarantee 4 percent interest, as well as making the full payment the state owes into the system each year, starting in fiscal year 2015. That would mean finding more than $300 million more.

Thayer said there has already been some cross talk between the chambers on whether a pension reform bill must say how to fully fund the required payments.

“We don’t need to deal with the funding mechanism, but what we do need to do is to express an intent to fully fund the actuarially recommended contribution in the next budget cycle,” Thayer said.

But the recommendations from the task force, alone, might not be enough to pass the House, said House Speaker Greg Stumbo, D-Prestonsburg.

Stumbo said true reform would mean finding a source for the extra money. Stumbo said leaving that out allows legislators to say they dealt with pension reform, “without doing true pension reform.”

“If you really want to fix the problem then we have to find the revenue to shore up the system,” Stumbo said.

Thayer didn’t think Stumbo’s objections would slow down the “strong momentum for pension reform.”

“The speaker has mentioned on numerous times that he feels it is the time to do pensions, and I feel like we’ve got a good chance going forward to get it passed this session,” Thayer said.

In the shorter legislative sessions during odd-years, each chamber would need a three-fifths super majority to pass any bill dealing with revenue. That could make it more likely tax reform – - which could be used to fund the pension system shortfall — would be done during a special session or in 2014.

About Nick Storm

Nick Storm joined cn|2 in December 2011 as a reporter for Pure Politics. Throughout his career, Nick has covered several big political stories up close, including interviewing President Barack Obama on the campaign trail back in 2008. Nick says he loves being at the forefront of Kentucky politics and working with the brightest journalists in the commonwealth. Follow Nick on Twitter @Nick_Storm. Nick can be reached at 502-792-1107 or nicholas.storm@twcnews.com.

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Comments

  • viewer wrote on January 12, 2013 02:29 PM :

    SB 3 should be no more pensions for legislators. SB 4 should be no more pension multipliers for the legislators who get picked to move to other state appointments by governor to get his bills passed at tax payers expense. SB 5 should be term limits at all elected postitions. SB 6 should be removing Rep Keith Hall from getting a chairman post after being found guilty of ethics and paying a fine for having hand in cookie jar. Where besides in gov you get caught and get promoted ??? Lets keep this love going….

  • viewer wrote on January 12, 2013 02:49 PM :

    And let me get my supper down before I hear that if we take legislators pensions away , we wont have good people running for these offices. A change of scenery may do us good. Or something like that….

  • viewer wrote on January 13, 2013 09:56 AM :

    Great op ed in the Herald this week about religion being hijacked by extremist. www.kentucky.com. If you get time take a look.

  • viewer wrote on January 13, 2013 11:18 AM :

    A friend called me about my question of where besides gov do you get caught and get promoted. He rightfully answered the mafia, if you keep your mouth shut about the others. So , I was wrong by saying only gov promotes people after doing wrong. And Rocky Adkins , dont think I have forgotten about you.

  • viewer wrote on January 13, 2013 11:39 AM :

    We will be watching which company gets the $9.2 million to work up at Morehead State.

  • sally sue wrote on January 14, 2013 09:24 AM :

    “We don’t need to deal with the funding mechanism, but what we do need to do is to express an intent to fully fund the actuarially recommended contribution in the next budget cycle,”

    Sounds like they are going to just kick the can further down the road while getting credit for “taking action” on reform.

  • Chris Tobe wrote on January 14, 2013 11:45 AM :

    Transparency is the only doable goal for this session. Full transparency for benefits like public salaries is obvious to everyone but our legislature. The other would be operational transparency at KRS by getting more separation for the 60% funded CERS from the 27% funded KERS.

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