Pension Reform Bill "A Great Beginning"

Listen NowKentucky lawmakers last week did as promised. In one quick week, they passed a pension reform bill in a special session called by Governor Steve Beshear. Kentucky Public Radio's Tony McVeigh covered the session.In the chaos of the final hours of the 2008 regular session of the Kentucky General Assembly, a tentative agreement between House and Senate leaders on pension reform collapsed. But in May, with state retirement systems still facing a 27-billion dollar unfunded liability, Governor Beshear urged legislative leaders to try again. In early June, they announced a new agreement and the governor prepared to call a special session. The session began on June 23rd, with House Speaker Jody Richards surrendering his gavel to deliver a floor speech."It is good news for all the citizens of this Commonwealth that the legislature is poised to pass pension reform. Pension reforms that will move us far down the road toward paying off the large unfunded liability of the systems."Special sessions cost taxpayers about $60,000 per day, but legislative leaders promised Governor Beshear they could get the job done in five days. By the end of the first day, a 179-page pension bill had cleared a House committee. That night, Governor Beshear gave lawmakers a pep talk."A quick and successful special session can signal the beginning of a new era in Frankfort. One where cooperation on critical public policy is the norm and where politics and partisanship are reserved for campaigns."By the session’s third day, the House was prepared to vote on the pension bill, which included a formula for reducing the unfunded liability. The bill, which mostly affects new hires, also requires state employees to work longer before drawing benefits and prevents so-called double dipping. That’s when a state employee retires, then finds another state job and begins building a second retirement. The bill drew strong praise from Frankfort Rep. Derrick Graham, who represents thousands of state employees."House Bill 1 is an attempt to uphold the state’s end of the bargain, to keeping the promises made to current employees and our retirees. But House Bill One is only a beginning." Speaker Richards: "Have all members voted? Clerk will take the roll. There being 98 members voting Aye, no members voting No, House Bill One is adopted!"The bill then moved to the Senate, where it again received quick committee action and was before the full Senate by the end of the week. Only one Senator, Republican Tom Buford of Nicholasville voted against it."I expect, under provisions of this bill, by 2025 we will still have an unfunded liability of over 33-billion dollars after what we vote on today. Now I know it’s been said this is a first step. I don’t know how long it’s going to take us to walk to the moon, but that’s a long trip." Senate President Pro Tem Katie Stine: "There being 35 Yays and one Nay, House Bill One is passed."As promised the special session was over in five days and Governor Beshear quickly called a news conference to sign the bill into law. Among those standing behind him as he inked the document was Sylvia Lovely of the Kentucky League of Cities. She said the bill, which will save local governments 55-million dollars in employer contributions this year, is a great beginning."It’s even more than a beginning, because it brings the rates down in the first year, allows some of the reforms to start take place and then the hard work begins of working on some of the other issues."Among those issues is the soaring cost of health insurance for retirees, which is under study by a special panel appointed by the governor. The group is also studying the feasibility of 401K-style benefit plans for state workers. Work group recommendations are due on the governor’s desk by November 1.