Wednesday October 18, 2017

Summary of Gov. Matt Bevin's pension reform plan

Kentucky EMS Connection

Kentucky Governor Matt Bevin released on Wednesday morning his long-awaited plan to fix Kentucky's pension crisis.

Gov. Bevin, House Speaker Jeff Hoover, and Senate President Robert Stivers provided 10 highlights of their plan during a press conference.

These highlights include:

1. The governor said his plan will save Kentucky's pension systems and will "meet the legal and moral obligations owed to current and retired teachers and servants."

2. The plan would mandate that the state pay its actuarially required contribution every year and create a funding formula that will mandate hundreds of millions more dollars into every retirement plan, aiming to improve the state retirement plans' health and make them "solvent sooner."

3. There will be no increase in retirement age for current public workers, and the current defined pension plan benefits will stay in place until the employee reaches his or her "promised level of unreduced benefit."

4. Retirees' will see no reductions in their pension checks. Their health care benefits also would be protected.

5. Future employees and teachers not in a hazardous profession will be moved away from pensions and into a 401(k)-style plan. Bevin said this will be comparable if not better to previous retirement plans.

6. Employees in hazardous jobs, including many public safety workers, would stay in their current pension programs.

7. A loophole would be closed, ensuring benefits get paid to families of deceased hazardous employees.

8. Legislators would be moved from their current plan into the same plan as other state employees.

9. The law would not go into effect until July 1, if it is passed by the legislature.

10. The changes would improve Kentucky's rating with credit agencies. Underfunded pensions have caused the state's credit ranking to take a hit, Bevin said.

In announcing the pension reform plan, Gov. Bevin said a special session to consider the proposal won't be called until "we're ready."