Resolution calling for Gov. Bevin, lawmakers to honor benefits accrued under inviolable contract tabled by KRS board

09/14/2017 05:30 PM

FRANKFORT – The Kentucky Retirement Systems board of trustees tabled action Thursday on a resolution urging Gov. Matt Bevin and lawmakers to honor benefits for pensioners and government workers accrued under the inviolable contract.

KRS trustee Jerry Powell offered the resolution, which also called for full actuarially required contributions to the Kentucky Employees Retirement System and State Police Retirement System, toward the end of Thursday’s meeting but some trustees voiced discomfort with voting on something they had only just seen.

Instead, they opted to send the resolution to legal counsel and reconsider it at a later meeting.

The resolution follows a series of recommendations from the PFM Group on how Kentucky should reform its public pension programs, which are among the worst-funded in the country with $37 billion to $64 billion in unfunded liabilities. Some of the group’s proposals drew criticism from retirees and workers, such as rescinding previously awarded cost-of-living adjustments.

Bevin and top legislators have tried to ease some of those concerns, telling retirees that COLAs would not be taken back as lawmakers reform Kentucky’s government pensions.

House Speaker Jeff Hoover has said a special session will likely be called in October, but the KRS board isn’t scheduled to meet again until a special meeting Nov. 13. John Farris, who chairs the KRS board, said another meeting could be called before the special session.

“If we get an answer early and it’s something that we feel like we need to act on either before, during or after a special session, we’ll certainly call members back together,” he told reporters after Thursday’s meeting.

Jim Carroll, co-founder of Kentucky Government Retirees, voiced a similar desire for KRS to defend retirees’ pensions during the public comment period of Thursday’s meeting.

Carroll told reporters that he would like to see the KRS board recognize and enforce the contractual rights of pensioners.

“If it is taking a position that it doesn’t have that duty, then I’d like for them to transparently explain why they don’t believe they have that duty for the benefit of those of us who are members,” he said. “Just tell us your reasoning why you don’t believe that it’s within your scope of fiduciary duties to, if necessary, litigate when contract rights are abridged.”

Despite attempts by top elected officials to mitigate their doubts on pension reform, public employees have inundated KRS with requests for pre-retirement consultations. Interim KRS Executive Director David Eager said such meetings have jumped 37.8 percent in September and 15.4 percent in October compared to the same months last year, with annual growth estimated at 13.2 percent.

Eager said some KRS employees are taking half their lunch breaks and working overtime to handle the surge in appointments.

Asked whether the uncertainty of a pension reform proposal makes the task of consulting with employees ahead of retirement more difficult, Eager said in some ways, that makes the job easier.

“All we can say or refer to is the facts, so if people are speculating the what-if questions, we can’t respond to the what-if questions because all we can deal with is what’s in the statutes right now,” he said. “If you retire based on what’s in the statutes today, this is what you’re going to get.”

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