(FRANKFORT, Ky.) – The Bluegrass Institute released the following statement regarding Gov. Matt Bevin’s veto of House Bill 358, which would allow non-public and quasi-government agencies to pay less than required to fulfill the huge spike in their pension payments scheduled to begin on July 1 — and to call a special legislative session to address the issue:
The Bluegrass Institute applauds Gov. Matt Bevin’s commitment to confront Kentucky’s public-pension crisis.
For nearly a decade, we’ve warned that past legislators using the pension system to curry political favor by adding nonpublic and quasi-government entities to taxpayer-subsidized retirement plans would bring us to this day when hard decisions must be made regarding the future of these agencies and the thousands of employees who work for them.
While it’s understandable that the systems were eager to come under the Kentucky Retirement Systems’ umbrella when the sun was shining and the retirement funds were flush with cash, this storm has blown in, pushed the Kentucky Employees Retirement System plan down to near-insolvency has them seeking shelter elsewhere.
While this storm was not of their own making and was caused by the reckless, irresponsible and retroactive enhancement of benefits awarded before they joined, resulting in the huge payroll contributions now being demanded to keep the systems afloat, taxpayers must not be asked to carry an even-heavier burden.
The entities which are able to buy their way out of the plans should do so, but none must be allowed to simply quit paying into the system while their employees continue to receive taxpayer-subsidized public-pension benefits.
We urge legislative leaders to work with the governor and use this opportunity to pass bold reforms like those contained in the Bluegrass Institute’s new pension paradigm for new teachers, which can be found at KentuckyPensionTruth.com.
This plan offers both a defined benefit for members while protecting taxpayers with a defined contribution that caps their funding responsibility and limits their risk while making important progress toward protecting future generations of Kentuckians from collapsing under the burden of debt created by the tragic spending of the past.
Contact Jim Waters at firstname.lastname@example.org, 859.444.5630 ext. 102 (office) or 270.320.4376 (cell).
The Bluegrass Institute for Public Policy Solutions, Kentucky’s first and only free market think tank, has been offering commonsense ideas to solve the commonwealth’s greatest challenges since 2003. Find these solutions at www.bipps.org.