Gov. Matt Bevin and the Republican leaders of the state legislature will unveil a proposal to fix Kentucky's ailing pension systems Wednesday morning.
In a press release issued late Tuesday the governor's office said that Bevin, House Speaker Jeff Hoover and Senate President Robert Stivers will present "a comprehensive plan to save Kentucky’s ailing public pension systems" in the State Capitol at 9 a.m.
"There have been hours and hours and hours of discussion among legislators and our administration in dialing this in. We are getting close," Bevin said in a recorded statement.
"This is a bill that every single legislator will vote for if they’re doing what’s right for retirees and state workers."
Earlier in the day Bevin said his proposal to fix Kentucky’s ailing pension systems would come in the form of a 400-page bill. At the time, he said the legislation was still being negotiated by members of his administration and leaders of the state legislature.
Bevin said the public would have "plenty of time" to review the proposal, which he called a “good plan.”
“It’s one that fulfills the promise, it’s one that allows people to get what it is that they were promised,” Bevin said.
Kentucky has one of the worst-funded pension systems in the nation. The main retirement fund for most state workers has only 14 percent of the money it needs and all retirement funds combined have an estimated liability ranging between $30 billion and $70 billion.
The pension systems’ lack of funds puts retirement checks at risk and puts a strain on the state budget — Kentucky legislators have had to set aside more and more money for the systems in recent years.
Bevin has promised to call a special legislative session for lawmakers to pass a bill that will deal with the pension crisis. Over the past months, the governor’s office and leaders of the Republican-led legislature have been meeting behind closed doors to come up with a consensus.
It’s unclear what Bevin’s pension proposal will include, though changes to pension plans for future state workers seems likely.
Bevin said that his plan will protect the pensions of “those that are retired, those that are working toward retirement.”
A consulting group hired by his office recommended weakening pension benefits for current and retired state workers by shifting future state employees from defined benefit retirement plans to 401(k)-style plans and raising the retirement age to 65 for most state workers.
The report prompted an uptick in state employees retiring out of fear that lawmakers would approve changes to the retirement plans of active employees.
Bevin said he’s not in favor of a proposal that would legalize marijuana in order to generate revenue that could go to the pension systems.
“If you look at this, the proposal that this would generate $100 million…we have a $60 billion problem at least, probably bigger,” Bevin said. “That’s 600 years of smoking pot to fix the pension crisis. I don’t think that’s a solution for Kentucky.”
The heads of the state’s pension agencies said the legislature needs to set aside $5.4 billion to keep the systems afloat — that amounts to about a quarter of the state’s two-year $21 billion budget.
