Pension Special Session Probable
Legislators announce agreement to shore up pension plans
Governor indicates he will call special session on June 23
One of the top legislative priorities for the Kentucky Chamber has been to pass comprehensive pension reform legislation to reduce future burdens on taxpayers and help shore up the severely under-funded public pension plans in Kentucky. The Kentucky Chamber of Commerce, through the Coalition for Sustainable Benefits, urged Gov. Steve Beshear to call a special session after legislators were unable to agree during the regular legislative session.
During the last session, the House and Senate passed separate bills, many provisions of which were similar. The Kentucky Chamber commends Gov. Beshear for his leadership in prompting legislators to work together to pass a meaningful proposal before the end of this fiscal year.
Yesterday, legislative leaders from both parties and both houses announced they have reached an accord and will pass legislation to shore up Kentucky’s public pension systems. This is an important first step toward slowing the growth in the unfunded liability of the pension systems. Legislators also agreed to continue their work with the governor's task force and to hold additional legislative meetings to address other significant cost drivers.
Click here to view a summary of the legislative proposal.
Under the plan, newly hired employees would have to work two years longer than the governor suggested and adhere to a new "Rule of 87." New employees could retire with full benefits after 30 years of service, as long as their years and their age added up to 87 or when they are 65 years of age. Another significant provision is the requirement to begin funding the program at the actuarially recommended levels, preventing future shortfalls like we now experience.
Key issues that remain in dispute are whether to move certain classes of public employees to different state pension plans and potential new models for future benefits. Legislative leaders, along with a number of experts and stakeholder groups, including the Kentucky Chamber, have been appointed by Gov. Beshear to a task force that will further study some additional public pension system reforms. The panel will make recommendations to the 2009 Kentucky General Assembly.
The Kentucky Chamber supports the goal of comprehensive public pension reform, and applauds the leadership demonstrated by the General Assembly and the governor to move the Commonwealth in this positive direction.
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