Bevin’s pension bill has a few surprises, such as where that 3 percent pay cut goes
One is that a controversial 3 percent pay cut for school teachers and state and local government employees -- which Bevin and top
Rather, the additional money to be taken from teachers' and public employees' salaries and deposited into the retiree health insurance funds -- an estimated
In other words, "the health insurance funds would get exactly the same amount of money as they did before, but you're just changing who pays for it. You're just shifting the cost to teachers and workers," said
"At the end of this shuffle, that's a couple hundred million dollars the state doesn't have to come up with now, and that will help them with the larger unfunded liability they have to address," Bailey said. "But to do it this way, where you're basically trying to hide what you're attempting, that just engenders distrust. The state would be better off if it explained itself."
Bevin's office did not respond to a request for comment Monday.
Last week, Bevin's office said that his pension proposal called for 3 percent paycheck deductions from nearly 208,000 teachers and public employees, on top of what they already pay for retiree health care, in order to strengthen those insurance funds at the Teachers' Retirement System of
"The retiree health care plans are underfunded," Bevin spokeswoman
Bevin's office made the draft language of the pension bill available to lawmakers Friday night and posted it on the state's official pensions website, pensions.ky.gov. However, the governor has not yet announced a date for a special legislative session to act on changes to the state's public retirement systems.
Much of the bill's contents has been discussed by Bevin in recent weeks. If adopted by the legislature, it would place teachers and public employees hired after next July in defined-contribution accounts, rather than traditional pensions, shifting the burden to them to save enough for their retirements, but offering employer matches of 6 to 9 percent of salary.
Existing retirees and employees would get to keep most of the benefits they were expecting, including defined-benefits pensions, although not all. For example, retired teachers would forfeit cost-of-living adjustments for five years, an especially painful squeeze since they do not get
It wasn't clear on Monday that Bevin and
"I can unequivocally promise to each and every one of my constituents that I will NOT vote for this pension bill," Morgan wrote on Twitter.
"Speaker (Jeff)
Other
"It's a complex, it's a very detailed bill. I'll reserve comment until I've had the opportunity to read the whole thing in its totality," said state Rep.
Other issues being raised by critics of the bill include:
-- In the future, the old and new governing boards that would manage the retirement systems -- TRS, KRS, the Public Employees Retirement System and the
-- Employees in the new defined-contribution systems would have to pay extra to buy death or disability insurance benefits rather than having it provided for them by their employers. This could be a particular burden for teachers, who are not enrolled in
-- Retirement benefits awarded under the newly-established Public Employees Retirement System would not be protected by the so-called "inviolable contract" that has traditionally shielded the retirement benefits of teachers and public employees. That means a new governor or legislature could make any changes they chose.
"As we continue to work through the 500 pages in this bill, one thing is clear -- this bill will hurt public employees and our state as a whole. Reducing public employee benefits will hurt their retirement security, negatively impact local economies and affect recruitment and retention in our state agencies and schools," the
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