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Pension reform & political will

June 5, 2013 By Leave a Comment

The issue of public pension reform is not going away.

Despite weak “reform” attempts in the 2013 Kentucky General Assembly, a remarkable unfunded liability remains. cn|2 Pure Politics recently caught with Sen. Chris McDaniel, R-Taylor Mill, who is advocating for further reform:

McDaniel said there will have to be more political will to talk about the issues still facing the retirement system including non-governmental organizations within the retirement system

Yes. More political will is needed if Kentuckians are going to see the changes needed. Moving the entire public pension system to a defined contribution, 401(k) style plan will be unpopular and will require considerable will to move forward BUT this must happen as the standard of living for all Kentuckians hangs in the balance of a $34 billion unfunded public pension liability.

Filed Under: Reduce Government Spending, Smaller Government Tagged With: , ,

Video: BIPPS talks public employee pension reform on KET’s Kentucky Tonight

May 14, 2013 By Leave a Comment

Bluegrass Institute president Jim Waters joined a panel discussion about how much progress was really made toward public pension reform during the 2013 Kentucky General Assembly.

(click on the image below to view the video)
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Read more about solutions to Kentucky’s public pension crisis.

Filed Under: Media, Reduce Government Spending, Transparency and Accountability Tagged With: , , , ,

Action Alert: We need your help on KET tonight!

May 13, 2013 By Leave a Comment

FutureShockSolutionsSquareThe state’s public pension crisis takes center stage on statewide television tonight! Bluegrass Institute president Jim Waters will appear as part of a panel on KET’s Kentucky Tonight discussing how much, if any, progress was made toward repairing Kentucky’s damaged and woefully underfunded public pension system.

Joining Jim on the panel will be Bryan Sunderland, senior vice president of public affairs for the Kentucky Chamber of Commerce, Sharron Oxendine, president of the state teachers union and a member of the Kentucky Public Pension Coalition, and Jason Bailey, director of the Kentucky Center for Economic Policy.

So, how can you help?

kytonight

1 – Tune in and watch at 8 p.m. ET on KET

2 – Call in to the show 1.800.494.7605

3 – Tweet @KYTonightKET, @BIPPS, and use #KYpensiondebt to comment on the show on Twitter!

4 – Email the show for questions and comments: kytonight@ket.org

5 – Share this with your friends on Facebook and encourage them to watch!

It is important that our state legislators are exposed to the right solutions to address the $34 billion unfunded liability enabled by a neglectful General Assembly. This year, The Bluegrass Institute released Future Shock Solutions: 16 steps to treat Kentucky’s public pension ailment which lists specific actions the state legislature can take to get the system back on track.

For instance:

  • Make the public pension system transparent
  • Move state employees to a defined contribution
  • Change the cost-of-living adjustment formula from a simple to a complex COLA
  • Rollback 2005‘s HB 299 which greatly enhanced pension benefits for legislators

Read more solutions here.

Filed Under: Reduce Government Spending, Smaller Government, Transparency and Accountability Tagged With: , , ,

When it comes to public pension reform, a little dab will NOT do ya’

May 2, 2013 By Leave a Comment

Sometimes the truth IS scary.

A recent call to action by the Bluegrass Institute drew some fire because some believed that we did not tell the whole story about legislators who voted against HB 299. In fact, we were accused of fear mongering.

The truth is, Kentucky’s public pension crisis is worthy of fear as it is endangering the financial viability of our state.

The author of the critique had this to say:

Sure, the legislature is to blame for sweetening its own pension deals. But that’s not all legislators. It’s primarily leaders and those scheming the system to make a mountain of cash.

The Bluegrass revisionist history crew apparently doesn’t want the general public to know that many legislators have voted against sweetening their pensions. That bunch is also set on making sure the public doesn’t find out that each year for the last four years? The State Senate has passed legislation to stop these messes.

The Bluegrass Institute doesn’t bother to mention legislators like Senator Jimmy Higdon, who has stood firmly against this mess. Or that in 2010 he introduced legislation that would have gutted House Bill 299 – but the House refused to vote on it.

While it is true that some legislators voted against HB 299 in 2005 the following facts remain:

  • The General Assembly greatly enhanced their retirement benefits.
  • Nothing has been done to effectively change policies and corrupt practices resulting from that legislation.
  • Kentucky’s unfunded public pension liability doesn’t go away because a few legislators voted against a bill, but who still stand to personally benefit from it.
  • Many of the legislators that voted for HB 299 are still in office as well.

This list of all votes for/against 2005′s HB 299 was published in the Bluegrass Institute’s 2012 Future Shock report. See any names you recognize? Many of these folks are still in office. Notice how several state senators didn’t even do their job by failing even to cast a vote. [Read more...]

Filed Under: Increase Free Markets, Reduce Government Spending, Transparency and Accountability Tagged With: ,

Put yourself in your state legislator’s shoes

April 30, 2013 By 1 Comment

DearKYTaxpayerBannerDear Kentucky taxpayer:

Put yourself in your state legislator’s shoes for a second.

Imagine you are a state senator with the opportunity to enhance your own wealth through legislation by manipulating the state’s public pension benefit to your advantage.

After all, what’s the harm in taking a bit more compensation for the arduous public service you perform?

Would you be able to resist the urge to give yourself a nice retirement bonus?

The fact is, our legislators couldn’t resist it. In 2005, they passed HB 299 which ushered in a series of policies that lined their retirement pockets at the expense of you, the taxpayer.

Now the system is $34 billion in debt, and while legislator pensions aren’t the sole reason for that, it certainly doesn’t seem right that our public servant legislators are raking in the dough while state workers’ pensions are at risk.

So put yourself in your state legislator’s shoes again. What would it take for you to make a stand among your peers to put an end to this abuse? I have to imagine the first step would be hearing from constituents – just like you.

Contact your state legislator here.

Filed Under: Increase Free Markets, Reduce Government Spending Tagged With: , , ,

Kentucky is stressed — pensions to blame?

April 24, 2013 By 1 Comment

 

 

 

 

 

 

 

A recent Gallup poll revealed that Kentucky is one of the top 5 most stressed states in the nation. Certainly not something to be proud of.

One has to wonder though, what is the source of this stress? Might it be Kentucky’s ever-growing public pension crisis?

Probably not. It is, however, easy to see how someone might think that is the case:

  • $34 billion unfunded public pension liability
  • legislators voting to increase their own pension benefits
  • private organizations receiving taxpayer funded retirement plans

Even just within the discussion of public pensions, Kentuckians have quite a bit to be stressed about. The problem can be solved though if legislators would consider these solutions.

Filed Under: Reduce Government Spending, Smaller Government Tagged With: , ,

Weak attempt at reform

April 23, 2013 By Leave a Comment

While state lawmakers and defenders of the status-quo pat themselves on the back for a last-minute, “successful” legislative session, the standard of living for all Kentuckians continues to be in danger.

Once again, state lawmakers failed during a legislative session to enact meaningful public pension system reform.

Rather than take effective action against a $34 billion unfunded liability, the Kentucky General Assembly passed a Band-Aid-like reform bill that only addresses a few symptoms of the problem rather than getting to the root cause.

For years, state leaders have claimed that as long as the state made its full actuarial payments to the pension fund, the system would correct itself.

In a dream world, that’s a nice thought. In reality, the system has gotten worse.

Our legislators are elected to represent the citizens of Kentucky, and part of that responsibility is being a good steward of taxpayer funds. They have created a pension system that overpromises and has been drastically underfunded. In the end, it’s the taxpayer that’s on the hook.

State lawmakers created this problem. Is it too much to ask of them to fix it? No.

As immediately as they can, they should make the public pension system transparent, move to a defined contribution system for all state workers, reduce overall retirement benefits for all current part-time legislators – not just future ones – and remove all private, non-governmental entities from the state-run pension plan.

The time for substantive action is now.

Read about real solutions to Kentucky’s pension crisis here. 
Filed Under: Increase Free Markets, Reduce Government Spending, Transparency and Accountability Tagged With: ,

Pension reform in four simple steps

April 22, 2013 By Leave a Comment

If Kentucky lawmakers are serious about reforming the state’s ailing public pension system, here are four steps they should seriously consider taking to get on the path to recovery:

  1. Make the pension system transparent. Why shouldn’t taxpayers know which politicians and bureaucrats are collecting two, or in some cases three, pension checks at their expense?
  2. Move from a defined benefit plan to a defined contribution plan. Right now, taxpayers shoulder all the risk in the funding of the public pension system. A defined contribution would split the risk between the taxpayer and the state employee. This would resemble a 401(k)-type savings plan in the private sector.
  3. Remove all private entities from the state public pension plan, including the Kentucky Education Association, Kentucky Association of Counties, Kentucky League of Cities, and the Commonwealth Credit Union in Frankfort. Why should employees of private entities receive taxpayer funded pensions?
  4. Legislators are elected to part-time positions. Their overall retirement benefits should be reduced to the same level of other public workers. How many part-time employees do you know that receive retirement benefits?

These steps would go a long way toward setting the public pension system back on a path to solvency. There is no reason why these cannot be implemented by the General Assembly during the next session.

You can learn more about getting Kentucky’s public pension system back on track here.

Filed Under: Increase Free Markets, Reduce Government Spending Tagged With: , ,

Eliminate “Air Time”

April 16, 2013 By Leave a Comment

Shouldn’t pensions be based on time worked?

It is commonly agreed upon that pensions are compensation to provide retirement stability for time actually worked in an organization.

You and I know this. Apparently, though, our state government does not.

Kentucky Retirement Systems allows some state employees to purchase what is called“air time.” This practice allows workers to purchase credit for time not actually workedso that the “years of service” portion of the pension calculation formula can be padded.

This works out well for the state worker because they are able to begin drawing benefits sooner than they normally would. The loser in this deal is the taxpayer who must assume all financial risk in delivering retirement income for years not actually worked by the state employee.

With Kentucky’s public pension system $34 billion in debt, does it seem like a wise practice to allow state workers to be compensated for time they didn’t work?

Contact your legislator today and tell them that you want the issue of “air time” addressed immediately.

Learn more about Kentucky’s pension system here.

Filed Under: Increase Free Markets, Reduce Government Spending Tagged With: ,

Op-Ed: Major reforms needed to repair Kentucky’s broken pension system

April 15, 2013 By Leave a Comment

The following is an op-ed I submitted for publication in the Lexington Herald-Leader. It was printed on Monday April 15, 2012. You can view the letter on the paper’s website here.

If Kentucky’s public pension system was a private-sector business, it would have been forced to close its doors many years ago.

Unfortunately, the pension system doesn’t exist in the private sector. Rather, it exists in the realm of government where inefficiencies and mismanagement can be papered over with a guaranteed flow of taxpayer dollars.

While the system continues to enroll more and more new state workers, it struggles to keep pace with the obligations it has already made. In effect, it has become akin to a Ponzi scheme: plush with cheap promises of future retirement benefits and the constant need to pay off past promises with dwindling taxpayer funds.

Simply put, this trend is not sustainable.

How did we get here, and who is responsible? Poor decision making by the General Assembly is largely to blame. [Read more...]

Filed Under: Increase Free Markets, Reduce Government Spending, Transparency and Accountability Tagged With: , , , ,
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