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Kentucky Supreme Court Strikes Down Pension Bill

In a major blow to Gov. Matt Bevin’s administration and the Republican-led legislature, the Supreme Court of Kentucky has upheld a ruling that struck down changes to the state’s pension system that passed into law earlier this year.

The pension law was challenged by Democratic Attorney General Andy Beshear, who argued that the changes violated state workers’ contract rights and that lawmakers had illegally rushed the bill to passage.

In a written statement Thursday, Beshear called the ruling a win for "hardworking public servants."

"It fully and finally voids the illegal cuts to their retirement, and clearly states that the governor and General Assembly violated the Constitution," Beshear wrote.

"The decision is also an important win for good government and transparency. It sends a message that the Constitution does not allow lawmakers to hide their actions. Because of today’s ruling, an 11-page sewer bill can never again be turned into a 291-page pension bill and passed in just six hours."

Like a lower court that ruled against the law over the summer, the Supreme Court did not weigh in on whether the specific alterations to the pension system were legal, but rather ruled that the manner in which legislators passed the bill violated the state Constitution.

After early versions of a pension bill failed amid noisy protests, late in the legislative session lawmakers unveiled a final version and passed it through both legislative chambers in a matter of hours.

During a news conference Thursday, Bevin called the court's decision a "sad day for Kentucky." He said the ruling was an insult to state lawmakers who had passed the measure.

"This is a poke in the eye, a kick in the teeth and a stab in the back to our legislature — the men and the women who were elected by the people to make the laws of this commonwealth," he said.

Bevin said although Senate Bill 151 "wasn't perfect," he believed it would have given the state "the chance to save the pension system."

Thousands of teachers and other state workers held massive rallies in Frankfort earlier this year to protest the changes.

The pension law would have changed how current workers can use saved-up sick days to qualify for retirement, and required employees hired between 2003 and 2008 to pay 1 percent of their salaries for retiree health insurance.

Future teachers would no longer receive defined benefit pensions that guarantee benefits from the point of retirement until death, instead receiving “hybrid cash-balance” plans that rely on stock market growth.

Some state workers hired since 2014 would also have the guaranteed rate of return into their hybrid plans reduced from 4 percent to 0 percent.

This story has been updated.

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