Stivers seeks to clear misconceptions about pension plans, talks 'tweaks'

10/24/2017 05:23 PM

FRANKFORT — Nearly a week after the framework for massive changes to the state’s pension systems were announced Senate President Robert Stivers is trying to clear up some of what he calls misunderstandings about the plan.

Speaking to Pure Politics in his Capitol Annex office, Stivers said that he’s heard from several groups and hopes to continue gathering input as lawmakers prepare to enter a special session aimed at shoring up $64 billion in pension underfunding.

Chief among the misconceptions, he said has been from teachers, many of whom who are poised to retire as their benefits plans have come under the microscope.

The “Keeping the Promise” proposal, calls for government workers, teachers and judges in the current defined-benefit systems for non-hazardous workers to continue building their pensions in those plans until they reach 27 years of service. At that point, they will be enrolled in a defined-contribution plan, with an option of transitioning into the 401(A)- accounts.

Those individuals who are over 27-years of service will continue to be able to accumulate defined benefit credits, so if you’re at 27 you can go to 30 , if you’re at 30 you can go to 33, if you’re at 29 you can go to 32 — continuing to get defined benefit credits,” Stivers said.

There have been many individuals and groups who have openly questioned the legality of the changes Republican legislative and Gov. Matt Bevin have proposed.

Stivers said the group looked at cases from other states when determining what changes could be made to pension plans in Kentucky, without violating the inviolable contract.

“You have to look at the totality of the circumstances — individuals will be able to retire at 27 years if they so desire, and then go into a different system, they will still continue to accrue benefits — it will be a different type of benefit,” he said, adding that they opted not to touch other things like health benefits.

“When the courts [in other states] look at this and what they looked at is ok, they could have done this but that would have been drastic and draconian, but they took a more minimalistic view and only did this – on this side which was a temporary suspension of a COLA.”

Another area of concern has been by those in police and firefighter pension plans — nearly half of all employees in the policing field fall into the non-hazardous category, which will see a number of changes including enrolling in a defined contribution program and possibly working to the age of 65 to get full retirement benefits. Meanwhile their colleagues were due to largely be held harmless in the plans.

Stivers said that they’ve recognized the discrepancy and that they would cure the issue by looking at a specific certification known as POPS or Peace Officer Professional Standards.

The Manchester Republican says as long as the changes are made, and tweaks to come, and the state shifts to level dollar funding they will have a “difficult time” but it’s something they can do for the next 30-years.

Before revenue is discussed, Stivers said that programs within the health, education and other areas that are currently not means-tested, including kinship care he said. He also said that there are programs that may not be need.

“We’ve never gone back ever and made people substantiate what their program does, and does it need the money it’s getting appropriated,” Stivers said. “It may need more, or it may need less or it may not even need to exist because it just does not give us the dollar value people think it should.”

The pension proposal also does not allow CERS the County Employee Retirement System to separate from the pension systems as a whole, he said the issue could come back up, but what he would like to see criteria in the separation.

A 590 page bill draft is expected to be released to the public next week, Stivers said.

Stivers has called a news conference on Wednesday to discuss misinformation surrounding the pension plans with the media.


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