FRANKFORT — An effort to reform Kentucky’s underfunded pension systems passed in its first hearing Wednesday from a state Senate committee meeting.
Senate Bill 2 stems from the recommendations of a legislative task force that met over the summer to try and solve the pension problems.
It includes a suspension of cost of living adjustments and creates a new hybrid plan that acts like a 401K with a promised rate of return.
State Sen. Damon Thayer, the bill sponsor, said the need for pension reform isn’t a partisan one.
“This is an arithmetic challenge and for us the math quite simply doesn’t add up,” Thayer, the Republican floor leader from Georgetown. “If we don’t do something, our pension system is going to be insolvent in as little as four years.”
The bill passed a Senate committee unanimously today. But committee chair Joe Bowen says he expects the House to tweak the legislation.
“This product, I think it’d be fair to safe, will look a little different at the finish line than it does at the starting line,” said Bowen, a Republican from Owensboro.
House Speaker Greg Stumbo said his chamber is still debating ways to handle the pension issue. He said any legislation needs to figure out how to fund the pensions fully.