Thayer says leaders will separate pension and tax reforms, discusses possible changes to retirement plans

08/10/2017 04:31 PM

FRANKFORT — Days after Gov. Matt Bevin told a radio host that tax and pension reforms would be split Senate Majority Leader Damon Thayer said that’s the direction the General Assembly is headed.

“At this time biting off the pension issue and tackling that in a special session is probably the best course, so I think that’s where we’re headed,” said Thayer, R-Georgetown. “We’re working very hard to come up with a bill that helps solve our pension problem, and something we can pass.”

Thayer predicted Bevin would call lawmakers back into special session to deal with the pension issues in late September or early October.

On the revenue side of the equation, Thayer said that the General Assembly will have to continue funding the Kentucky Retirement Systems, but warned to get there budget cuts would likely have to be enacted during the next biennium budget, which is crafted next year.

For retirees, current state employees and future employees there will be structural changes, Thayer said.

“Fewer changes for those that are retired, a few more changes for those that are currently employed and then I would say future employees are going to have a whole new system across the board,” he said.

For current retirees, Thayer said “everything outside of the inviolable contract should be and would be considered.”

One example is a “sick day issue” for current teachers. The Georgetown Republican said some teachers stockpile their sick days to increase their retirement benefits. The stockpiling of the days adds millions of dollars in debt to the pension systems, Thayer said.

The majority leader added that the sick days are not a benefit promised in the inviolable contract, and thus could be changed by the General Assembly. However, he warned that taking away the days could lead to a mass exodus of teachers.

“There’s a pretty good argument out there that you can’t just pull those away from people right away — we certainly don’t want to encourage mass retirements,” he said.

He said there is a reasonable way to phase out the use of hoarding those sick days, and he added that the longer a person was in the system the longer teachers would be able to keep “all or part of your sick days.”


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