|By John Cheves, Lexington Herald-Leader|
|McClatchy-Tribune Information Services|
Here are some of the major issues to watch:
For many years,
Now the bill is due.
State employees are guaranteed their pensions by law, so a collapsing pension fund could force tax hikes and suck money from everything else, including schools and public safety. Bond agencies have noticed, downgrading
"This is not just another
Lawmakers say there's no point in assigning blame.
"We're focused on solutions," Sen.
Thayer co-chaired a legislative task force that proposed solutions in November. It said the legislature must pour more money into the state pension fund, starting with an extra
Lawmakers insist they're serious about fixing the problem this time. House Speaker
Thayer's task force also recommended trimming retirement benefits. A law requiring annual cost-of-living adjustments for pensioners, typically waived in recent years, would be repealed altogether.
Instead of pensions based on their highest salary years, new state employees would enroll in a "hybrid cash-balance plan" that guaranteed them at least a 4 percent return on money they set aside over their careers -- like a private sector 401(k) account, but with some protection. However, the new employees' benefits would not be shielded by the same "inviolable contract" that covers current employees, so the legislature could come back later and reduce them.
State employees and retirees are upset by what they consider an ideological attack on defined-benefits pensions.