FRANKFORT, Ky.- In just 10 days, pension contribution rates for regional universities and quasi-state agencies are set to about double. "It was one of those deals when once again, something was getting done at the very end of the session," Larry Totten said of House Bill 358. When the legislature passed HB 358 on the very last night of the legislative session, Totten, the president of the Kentucky Public Retirees, felt it was a bad move. "It was pretty obvious that it was not a bipartisan piece of legislation, that there were issues that came up after it was passed that was not a surprise," explained Totten.
Both Totten, and his counterpart with the Kentucky Government Retirees, Jim Carroll, say they were happy Governor Matt Bevin vetoed the bill. "I was relieved he vetoed the bill, because it had some serious problems with the bill having to do with the contract rights of participants inKentucky Retirement Systems," Carroll said. However, they say Bevin's replacement bill isn't much better. Carroll said, "Think it's a bad bill because it basically turns Kentucky retirement systems into a bank. It makes KRS, the Kentucky Retirement System basically take on the risk of allowing quasi government employers to leave the system and to pay off their liabilities over decades and that's a bad idea when we're the nation's worst funded state pension system."
"The bill has issues, not the least of which is that is penalizes, to some degree, Tier 1 and Tier 2 employees, depending on how their employers chose to leave KRS," added Totten. Totten said he's pleased with some of the governors changes to the original bill. "It's got some things that the governor tried to address in his four points that he agreed to change. The fact that in the first version, a state employee could not sue a bill, was something I'd never seen before."
Bevin has said he won't call a special session until he has the votes. Senator Chris McDaniel (R-Taylor Mill) said he isn't sure if Bevin has the votes yet. McDaniel told reporters, "Whether the House has the votes, I don't know at this point. No-one has told me that the definitely do, so I just don't know the answer to that question."
Suzanne Miles (R-Owensboro), who is the majority caucus chair insinuated the House does not have the necessary votes, but did say she has been looking at scheduling. "I have been cross referencing multiple calendars and conferences. We have a lot of people who are signed up for conferences. As you know, if the governor calls a special session, those arrangements will be canceled and people will be coming in, rather than going to conferences. And that's part of it. And we all know," said Miles. Totten and Carroll are both hoping for more changes before the special session is called.
Carroll requested, "Lets look at putting funding, so these quasi government agencies can participate in KRS and not dis-enroll all of their employees. What we say is freeze it and then fund it. So lets go ahead and freeze the contribution rate that they're paying now, that they've paid over the last fiscal year, for another year, and then lets take a serious look at funding options for the 2020 session." Totten says he that's what he wants, but he says he doesn't think that will happen. If that doesn't happen, he says he has an alternative, explaining, "What I want to happen is KRS get its funding so that all of us that worked 30 and 40 and 50 years in the system have pensions as we were promised when we were hired. Now, how you get there. There's obviously different paths to how you get there. And funding on that isn't part of the issue. I used to call it a hole in the dyke, now I think it's more of a whack-a-mole issue." Rates will go up July 1, the first payment at those rates won't be due until the end of July, so lawmakers say they do have a bit more time.