Recalculating pension benefits for retired lawmakers who took other government jobs will likely end up in court if passed

10/19/2017 07:22 PM

While the pension reform proposal laid out by Gov. Matt Bevin and top legislators on Wednesday doesn’t alter benefits for government retirees, the same can’t be said for former lawmakers who boosted their retirement payouts thanks to higher-salaried jobs in the public sector.

The plan calls for a complete rollback of the controversial 2005 law that allows legislators to count their salaries in other government work toward their pension calculations, including for ex-lawmakers who are already collecting retirement checks, some of whom are drawing annual pensions worth more than $100,000.

That provision, which would also impact current and former lawmakers in defined-benefit plans who haven’t retired yet, surprised Rowan County Judge-Executive Walter Blevins, who served in the legislature 33 years before his election to the top county post in 2014.

He says that aspect of the proposal is “unfair” to ex-legislators like him, and if the proposal becomes law, he will likely sue or join a lawsuit to protect his retirement benefits.

“I think it’ll be a law case,” Blevins said in a phone interview Thursday. “I think I should have an inviolable right just like anyone else.”

Kathy Stein, a family court judge in Fayette County who served in the General Assembly from 1997 to 2013, said the proposal seems to violate the inviolable contract rights of legislators.

“I tend to believe the inviolable contract that we entered into when we took office would apply as far as reduction of any of the benefits that were accrued,” Stein said in a phone interview.

“I’m almost sure there would be a lawsuit from somewhere about that because it could seriously affect a number of people,” she added, also questioning whether the proposed 3 percent contributions for health care from lawmakers paychecks could be approved since elected officials can’t alter their salaries during their terms.

Still, Stein doubted that she would seek legal recourse if the plan is enacted.

Others in similar positions as Blevins and Stein, including retired lawmakers, did not return requests for comment Thursday.

The Governor’s Office noted that it required former legislators who took jobs in the administration to sign waivers that they would not count their executive-branch salaries toward their pensions.

Michael Goins — communications director for Auditor Mike Harmon, who left the seat he held in the House since 2005 after his election as state auditor in 2015 — said Harmon and his chief of staff, former legislator Sara Beth Gregory, are reserving comment until a final bill been released.

“We would like to point out that as a member of the House, Auditor Harmon did not vote for the reciprocity provision during the 2005 Regular Session of the General Assembly,” Goins said in an email to Pure Politics.

The office of Agriculture Commissioner Ryan Quarles, who served in the legislature from 2011 until his election in 2015, declined a request for comment.

According to the state Senate’s policy and budget staff, current and former members of the General Assembly will be able to count their time in the legislature toward retirement eligibility, but their benefits will be determined by the individual systems in which they participated. Currently, legislators are able to combine their years of service and salaries across the pension systems to calculate retirement benefits.

Jim Waters — president of the Bluegrass Institute, which has raised concerns about the 2005 reciprocity law for years — criticized much of the pension reform plan released on Wednesday, but he said the provision that rolls back legislative retirement benefits was one of the strongest pieces of the proposal.

He said the 2005 statute had been used as a political tool in the past, citing past efforts by Gov. Steve Beshear to open seats in the state Senate, where Republicans have held a majority since 2000, through appointments.

“The legislators are putting this plan together under the specter of this past corrupt policy and that they were going to have to address that if they were going to have the credibility to address the pension benefits of other retirees in the system,” Waters said in a phone interview.

Waters believes the matter will ultimately be litigated if passed into law, and House Minority Floor Leader Rocky Adkins says such a route is likely since it would affect people who are already drawing pension checks.

“If that legislation has been passed to go back retroactive and it impacts someone who is already in the system, is already drawing benefits or whatever it may be, there is, in my opinion, great potential for litigation,” Adkins told reporters Wednesday in his Capitol Annex.

Policymakers who have worked for months on the proposal defended the proposal’s legality.

Amanda Stamper, Bevin’s communications director, said the Governor’s Office is “confident” that the changes proposed in the plan “stand on solid legal ground.”

House Speaker Jeff Hoover, R-Jamestown, also expressed confidence if the proposal ultimately winds up in court.

“We had input from attorneys and groups on the inviolable contract,” Hoover said in a statement. “Our decisions were based on that input and we feel good about our decisions withstanding legal challenge, although I expect there may be challenges.”

Waters, too, thinks that aspect of the proposal will pass legal muster if it ever ends up in court. He argues that the 2005 law itself is unconstitutional because lawmakers who voted for it ultimately benefited with higher pensions.

“If it’s challenged in court, that would be an argument I think that could contribute to this law being able to withstand a legal challenge,” he told Pure Politics.


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