The legislative session for Kentucky ended with a failure to enact any long overdue pension bill reforms. The governor vetoed the current pension proposal but an ally of Republican Gov Matt Bevin appears to have another proposal in the works.
The ally in question is Mr. Bevin’s running mate Sen. Ralph Alvarado- Mr. Bevin is up for reelection this year and is seeking another term. Mr. Alvarado is adamant about finding a solution that makes mathematical sense. “We’re looking at trying to make sure that we have something that’s going to make actuarial sense,” Mr. Alvardo said, “[one that will] take care of those who are already retired.”
Mr. Bevin wants to hold a special session to discuss the state’s pension on July 1st. Mr. Alvarado hopes that a consensus can be reached in time for the arrival of a new pension bill.
The state is facing a pension debt of $37 billion and is looking to find a way to salvage their financial hemorrhaging. Governor Bevin vetoed the version of the pension bill brought forth by the GOP controlled General Assembly citing concerns that it would leave the state $800 million in the hole. The bill would have allowed the 118 quasi-government agencies the ability to leave the pension system and avoid any cost increases. The pension bill would have permitted these agencies to create their own pension plans. There is one catch: In the event that the pension payouts are 30 days late, the state could then seize control of the pension and make any changes. Furthermore, employees hired after 2014 forward would experience a significant decrease in benefits.
Mr. Alavardo, who has been largely silent on his version of the pension bill, is optimistic that a consensus can be reached in time for summer.