State legislators say a special session to discuss Kentucky’s ailing pension system probably won’t happen this year.
Gov. Matt Bevin suggested a special session to address the state’s pension in November. It’s currently one of the most underfunded systems in the nation. But during a WFPL News Special Tuesday evening, Democratic State Senator Morgan McGarvey said a special session now would waste taxpayer dollars.
“It’s possible. It shouldn’t be likely or probable, though,” McGarvey said. “We have not seen a new version of this bill. We have not seen financial scoring for this bill … I think [a special session is] a waste of taxpayer money.”
Bevin is proposing major changes to the current system — mostly phasing out the state’s use of a pension system that guarantees benefits to state retirees for life. Instead, most future state workers — including teachers — would be enrolled in 401(k)-style plans where their retirement payments would depend on how much money they and the state contribute throughout their working years.
Republican Rep. Jerry Miller, a guest on the news special, also said a special session is unlikely to happen this year. Miller said Bevin’s proposal to move toward 401(k)-style plans could remain in the bill but some of the governor’s other suggested reforms might not go through. Among them, a proposal to require current workers to pay 3 percent of their salaries to retiree health, and a plan to freeze teachers’ cost of living adjustments for five years.
“That was in the governor’s proposal and I think that’s one element that the legislature, roundly, has backed away from,” Miller said. “There’s some very narrow exceptions likely to be made. But largely, that will not be asked of teachers.”
Since Bevin revealed his 505-page pension plan, teachers and state workers have largely criticized it, saying it would cut benefits guaranteed by the current pension system. But state budget director John Chilton defended the proposal Tuesday, saying it would benefit teachers and employers.
“The money will be put in a separate account for employees and they’ll have the opportunity to guide the investment of that,” Chilton said. “The plans are portable, which is a big advantage for those who move from one employer to another … there’s lots of advantages to a 401(k)- style plan.”
Though Miller and McGarvey said a special session is unlikely, state law allows Bevin to call the session at any time. McGarvey said Dec. 11 and Dec. 18 are the only dates possibly for a special session. Legislators convene for their regular session Jan. 2.