Gov. Matt Bevin is taking his proposed pension changes on the road this week, pitching business groups across the state about his bill that would — among other things — move most future and some current state workers onto 401(k) style plans.
The plan has drawn fire from state employees who worry that future hires and current workers affected by the changes would receive less-generous benefits from the state.
And lawmakers — especially those from rural parts of the state where government and local school districts are sometimes the largest employers — have been slow to come around to the plan.
On Monday, Richmond Republican Rep. Wesley Morgan announced via Twitter that he would not support Bevin’s bill despite pressure from GOP colleagues.
“I can unequivocally promise to each and every one of my constituents that I will NOT vote for this pension bill,” Morgan tweeted.
“I agree there is a problem. But we need more time, transparency, and consideration b4 we tackle this issue that affects so many Kentuckians,” he wrote.
Bevin can afford to lose a few Republican votes in the state House of Representatives, which has 64 GOP members out of 100 after last year’s elections.
However, several Republican representatives in the western part of the state are expressing concerns about the bill also, according to WKMS.
In addition to the 401(k)-style provisions, Bevin’s plan would tinker with current employee and retiree benefits — retired teachers would have cost of living adjustments suspended for five years, teachers and other state employees would have to switch to 401(k)-style plans after 27 years of service and all workers would have to put 3 percent of their salaries towards the retiree health plan.
Al Cross, director of University of Kentucky’s Institute for Rural Journalism and Community Issues, said rural lawmakers can expect a lot of pressure from their constituents on the pension issue because so many are employed by the government.
“A lot of rural counties don’t have many large employers,” Cross said. “It’s fairly common in a lot of these small counties that public schools and local government are really big employers.”
At a presentation given to the London Chamber of Commerce on Tuesday, Bevin said Kentuckians should have known from his campaign messaging that these provisions were coming.
“Anybody that was paying attention or went and looked for themselves and did the homework and did read what was put out there cannot say they did not understand what I was calling for,” Bevin said in a video posted to the chamber’s website.
Indeed, Bevin did advocate for moving new hires onto 401(k)-style plans and increasing employee contributions to the retirement systems for current employees when he was running for governor.
In his “Bevin Blueprint” campaign document, Bevin said the state “must examine all options for moving existing employees” into 401(k)-style plans and “all current employees should be required to make increased pension contributions in order to help secure their own pensions and make the system more financially sound.”
Bevin told attendees at the London event that the changes are necessary despite the discomfort.
“I know it’s hard and I know it’s not easy and it’s not something that anyone likes, people don’t like change,” Bevin said.
“But the bottom line is this is something that has to be done to make sure that whether you’re insulated or not — the system is in dire, dire straits — something has to be done.”