Bluegrass Beacon: Legislators boost, judge busts liberty

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

 

This edition of “Liberty Boosters and Busters” is brought to you by reasonable Kentuckians who reject racism, bigotry and censorship with every fiber of their freedom-loving beings.

Liberty Booster: The attorney general’s office decided in favor of the Bluegrass Institute Center for Open Government in its appeal challenging a Jefferson County school board meeting at a private law firm on the 28th floor of an office building in downtown Louisville on a Sunday afternoon in April.

Assistant Attorney General James Herrick ruled the meeting – held to discuss applicants for the district’s then-vacant interim superintendent’s position – violated the law requiring public agencies to conduct meetings “at specified times and places convenient to the public.”

It’s also likely the building was locked that day as it was on a subsequent Sunday when some of my colleagues at the institute tried to enter – an experience Herrick referenced in his ruling.

Liberty Buster: U.S. District Judge Danny Reeves allowed Eric Conn, the eastern Kentucky lawyer who pleaded guilty to engineering one of history’s largest Social Security fraud campaigns, to remain free on home incarceration – despite warnings against doing so by an FBI agent and witnesses claiming Conn had crossed 140 borders in eight years and had vowed to run before going to jail.

Conn ran, and likely is now sipping martinis and hanging out on the beach of some country with women for whom he previously claimed to have provided “English lessons,” and with whom the U.S. has no extradition treaty.

Yet Reeves, the judge, forced Sam Girod, an Amish farmer from rural Bath County, to remain in jail for months without bond while awaiting trial before handing him a harsh six-year prison sentence for the “crime” of mislabeling homemade herbal skin salves containing such dangerous (sarcasm dripping here) ingredients as chickweed and peppermint and not acquiescing to the Food and Drug Administration’s ideological thuggery.

Prosecutors, gung-ho though they were to destroy this man and ridicule his way of life, failed to produce a single victim harmed by Girod’s concoctions.

Yet Reeves permitted Conn, a wealthy white-collar criminal whose fraud resulted in 1,500 people losing their benefits and at least one person committing suicide, to remain out of jail.

He also handed a weak six-month sentence to Charlie Andrus, a former chief regional Social Security judge who pleaded guilty to conspiring with Conn to retaliate against the whistleblower in the campaign defrauding the program of $550 million.

Reeves in an unrelated case allowed a former University of Kentucky employee who swindled the school out of $200,000 to avoid prison altogether with a sentence of probation, calling it “sufficient punishment.”

Yet farmer Girod, who’s harmed no one and had no criminal record when his nightmare began, languishes in a Pennsylvania prison more than 400 miles away from his home.

An appeals-court reversal or presidential pardon would go a long way toward highlighting the insufficiency of this judge’s contemptible inconsistency.

Liberty Boosters: Gov. Bevin and Frankfort’s Republican legislative leaders for planning to tackle pension and tax reforms separately.

Claims that tax reform is critical to generating revenue wrongly blame Kentucky’s public pension woes on insufficient support from taxpayers or poor returns on investments or, at the very least, station the cart before the horse.

The retirement systems’ funding levels continue to fall even though the commonwealth’s current budget poured an additional $1.2 billion into them.

Also, investment returns for the past 30 years have, on average, exceeded more than 9 percent in the Kentucky Retirement Systems and 8 percent in the Teachers’ Retirement Systems.

At the core of the pension crisis is a structural weakness rather than lack of dollars.

Stop the digging by fixing the systems’ benefit structures.

Then, looking for more dirt to fill the hole becomes an exercise in productivity rather than futility.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

Bluegrass Beacon — Change the culture of secrecy: Pledge transparency

BluegrassBeaconLogoA recent S&P Global Ratings survey declares that the commonwealth where Lincoln was born now has the nation’s worst pension crisis, a distinction previously held by neighboring Illinois, known as the Land of Lincoln.

The only ones who can ultimately apply the prescription needed to fix what S&P describes as a $31.2 billion shortfall will be the 138 members of the Kentucky General Assembly, which makes addressing the pension deficit the numero uno issue in the current political campaign.

Using S&P’s numbers, eliminating the pension deficit today would require $7,349 dollars from the piggy banks of every single one of the 4.3 million men, women and children in Kentucky.

Yet while it’s the greatest threat to Kentucky’s economic vitality and jeopardizes funding of every other government program – as well as casting doubt on the availability of future retirement benefits themselves – most Kentuckians don’t know much about the public-pension plans.

While current ongoing audits should reveal important information about how the Kentucky Employees’ Retirement System – the largest of those plans – arrived at the point of near-insolvency, which should lead to ideas about possible solutions, more of the commonwealth’s elected officials need a stronger level of commitment to transparency.

This government that Lincoln reminded is of, by and for the people cannot conduct its business behind a cloak of secrecy while entrenched in a culture that denies those very citizens access to information needed to hold their representatives accountable.

The consequences of creating such a culture includes quiet passage of several bills in recent decades allowing politicians to pad their costly pensions and ensure the healthiness of their own retirement system while revealing even less about personal benefits than state workers and teachers offer regarding the plans in which they are enrolled.

Some politicians have hypocritically called for even greater transparency from those other systems while failing to support more openness for their own system.

Unfortunately, too many of these calls have been about reaping political benefits from talking transparency rather than a rock-solid commitment to changing Frankfort’s culture of secrecy.

Fortunately, an increasing number of state legislators and a healthy segment of candidates running for office this year are demonstrating genuine support for changing that culture by signing the Bluegrass Institute’s pledge to support making the part-time politicians’ pension system transparent.

This narrowly focused 67-word statement vows support for allowing access to the “name, status and projected actual retirement benefits and benefit payments” of both current and retired legislators.

Knowing that transparency is not only sound policy but also politically popular, some incumbents agreed to sign the pledge when pressured by opposing candidates yet have failed to follow through.

For instance, Rep. Jeff Taylor, D-Hopkinsville, promised to sign when challenged by his Republican political opponent Walker Thomas – one of the 70 pledge-signers – but hasn’t done so.

However, the pledge is more than just about good politics or the right vote on specific bills.

It’s about making transparency Frankfort’s default position so that Kentucky’s tallest Goliaths – including its pension crisis – can be brought down.

House State Government Committee chairman Brent Yonts, D-Greenville, returned his unsigned pledge with a note claiming support for revealing current legislators’ benefits but not for “making a pledge of my vote to issues until I see the issue presented in a bill which I read.”

But the pledge isn’t just about a particular bill or voting a certain way. It’s about policymakers agreeing to lead in changing the current environment of state government from one of secrecy to openness and giving citizens a tool to hold them accountable.

If, as Scripture states, “the time is come that judgment must begin at the house of God,” then making decision-makers’ benefits available represents the first pull of Kentucky’s pension blinds, which have been closed for far too long.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon: Teachers’ pensions and their sick-day pay

BluegrassBeaconLogoTeachers’ retirement-system bureaucrats who stand guard over the commonwealth’s unsustainable public pension gold mine would have us believe that retirement policies are too obscure and mysterious for taxpayers to grasp.

Rather, the real concern of these guardians of our public-pension system is that enough taxpayers will grasp the full extent of the generosity of these benefits and conclude: “we simply cannot afford such luscious benefits.”

Considering pension payments are determined in large part by salaries, such will likely be the response of many Louisville taxpayers in light of a recent survey released by the Jefferson County Public Schools (JCPS) showing its teachers are among the nation’s highest-paid instructors.

The JCPS salary schedule reveals that Rank One teachers with 25 years’ experience pulled in $81,887 during the 2015-16 school year, up from $80,256 in 2014-15 and $79,462 in 2013-14.

Teachers who want to use their three highest annual salaries in determining the size of their pension checks must be at least 55 years old and have taught for a minimum of 27 years.

Many teachers retire after 30 to 33 years in the classroom, allowing them to boost their pensions by including their three highest annual salaries as well as taking full advantage of a service-credit rating that increases after working for three decades.

While the salaries in JCPS are higher – much higher, in many cases – than those for teachers in other parts of the commonwealth, the salaries for Louisville’s teachers do reflect the type pay – and thus level of pensions – amassed by many administrators across the state.

Using the legislatively approved formula, a Rank One teacher in Louisville who retires after 33 years can expect an annual pension of $67,649, or $5,637 monthly.

I reached that retirement amount simply by multiplying the average of those three highest years of salary mentioned for JCPS’ Rank One teachers by the service credit that all Kentucky teachers get – 2.5 percent for the first 30 years and 3 percent for each additional year.

It adds up to an 84 percent service credit and a bountiful pension for a retiree who works for less than 190 days annually for 33 years, with the bounty coming from taxpayers, many of whom work many more days per year yet cannot even afford their own retirement plans, or certainly not benefits as rich as Kentucky Teachers’ Retirement System (KTRS) pensions.

Add in the value of unused sick days – which is not included in that $5,637 monthly check for the JCPS Rank One retiree I mentioned earlier – and teachers’ pension checks grow like Jack’s beanstalk.

State law allows teachers to embed 30 percent of the total value of all unused sick days throughout their career – a maximum of 10 days per year and 300 per career – into the formula determining their pensions.

Applying state law, the value of each sick day is determined by taking KTRS retirees’ final annual salary – $81,887 in the case of JCPS – and dividing it by 185 days, which in the case of Louisville’s veteran instructors equals $442.63. The law allows retirees to apply 30 percent of the total value of their unused sick days to determine their lifetime pensions.

If this veteran JCPS teacher accumulates 150 – or half – of the unused sick days allowed by law, she not only gets a check for $17,358 when she retires (30 percent of the value of those unused sick days minus 12.855 percent that goes into the KTRS), she also gets to apply that amount to her retirement in a way that expands the size of those pension checks for a lifetime.

In the end, our JCPS retiree’s annual pension will jump an additional $5,577 each year to more than $73,000 (not including a 1.5 percent annual cost-of-living increase) for the rest of her life just for – as the late Yogi Berra might have said – doing what she’s already paid to do.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Lowell D. Reese: A true Kentucky hero

Lowell D. Reese250px-FutureShockSquareThe Bluegrass Institute is saddened at the death of one of our commonwealth’s –   and country’s – fallen heroes.

Lowell D. Reese, a Kentucky native and founder of Kentucky Roll Call, a public-affairs publishing company in Frankfort, passed away on April 15.

Reese, who fought for his country as a battalion commander on the front lines in Vietnam, served the commonwealth passionately and faithfully — particularly in efforts to advance sound policies that would bring badly needed reforms, change the trajectory of Kentucky’s future and improve the lives of his fellow Kentuckians.

He helped spur efforts in recent years to shine the light on Kentucky’s public-pension system, taking particular aim at House Bill 299, which he labeled the “Pension Greed Act” because it lets legislators calculate their legislative pensions using their full-time salaries in another state or local government job rather than their part-time lawmaker salaries.

“This practice allows part-time legislators to convert their normal pension to super-sized pensions,” Reese wrote in Future Shock Solutions: 16 steps to treat Kentucky’s public pension ailment, the final in a series of Bluegrass Institute policy reports he authored on the state’s retirement plans.   

Reese often stated that the first and most-important of those steps was making the commonwealth’s retirement plans transparent, allowing taxpayers – especially retirees who depend on state-funded pensions for their livelihoods and economic security — access to information needed to hold Frankfort’s politicians accountable and achieve challenging reforms.

Reese in the Future Shock series of reports put the unfunded pension-liability crisis in perspective:

Kentucky’s public servants and retirees are increasingly and rightfully concerned about the security of their retirement livelihood. But towering above that, funding their pensions has become a societal issue.

The standard of living of all Kentuckians is at stake. How is that, you ask?

Human progress depends on economic progress, and economic progress depends on laws that favor it — and on education. Two-thirds of the state’s budget, the General Fund, goes to education. When public employee pensions compete with other government programs for funding, pensions will come first.

Following the minor pension-policy changes enacted in 2013 by the Kentucky General Assembly, Reese pointedly chastised the legislature for failing to address “benefit creep.” He called tackling the expenditures in the system “the other third rail in politics,” in part “because it would draw attention to the legislators’ role in creating the crisis.”

His prophetic analysis of the impact that the public-pension crisis was having on the entire economic vitality of the commonwealth in a Courier-Journal op-ed in January 2014 rings just as true – perhaps even truer – in April 2016 with recent passage of a budget that cuts higher-education funding in order to increase payments to the retirement systems but does nothing to address the plans’ expenditures:

Pensions are dipping into the budget of the commonwealth as never before. Pensions are crowding out education. They are crowding out infrastructure. They are crowding out programs that affect the lives of all Kentuckians.

Lowell Reese was a man who served his country in the fight against communism in Vietnam and his commonwealth in a campaign to address the most challenging issues of our day. He is a true Kentucky hero.

The Bluegrass Institute sends our deepest condolences to his wife, Carol, and the entire Reese family.

A celebration of life gathering will be held at a future date.

Bluegrass Beacon – Teachers and their pensions: Doing the math

BluegrassBeaconLogoLots of retired teachers bared their angry fists at me following my recent column about the soon-to-retire public school administrator who will, if he fulfills life expectancy, collect pension checks for longer than he worked, enjoy annual cost-of-living increases and amass a KTRS-funded $5.6 million fortune by retiring at 49 years of age after working 27 years.

“Please be accurate rather than (highlight) one exceptional pensioner!” one retired emailer scolded.

However, it behooves all of my retired-teacher friends to remember: the same shrinking KTRS kitty that’s billions upside down yet which they depend upon for their own pensions is the very same plan struggling to fork over the money for that administrator’s lavish benefits.

Yet while highly paid superintendents and principals have both hands in Kentucky’s pension pot, some basic mathematics reveals that many retired teachers overdo it with claims of humble pensions.

According to Daviess County Public Schools’ published certified salary schedules for the past three years:

  • Rank 1 teachers with at least 21 years of experience earned gross salaries of $62,364, $62,988 and $64,248, respectively, during the three most recent years – presumably their three highest annual salaries – for a total of $189,600 and an average of $63,200.
  • Daviess County teachers who spend 33 years in the classroom and retire in their mid-fifties with those three highest years of salary will, according to the KTRS website’s own “Benefit Estimator,” receive a total service credit – a complicated part of the pension formula used to determine retirees’ benefits – of 84 percent. (The total service credit is established through multiplying the first 30 years by a 2.5 percent per-year service credit and the final three years by an enhanced annual 3-percent credit and combining those totals.)
  • The average salary of $63,200 multiplied by the 84 percent service credit results in a $53,088 gross annual – or $4,424 monthly – pension check.

Sounds reasonable so far, right?

Let the unreasonableness begin:

  • According to KRS 161.155, 33-year employees are allowed 10 sick days a year and can count up to 300 unused ones toward their annual salaries used to determine their retirements.
  • State law requires that 30 percent of the total amount of the average daily salary of these 300 days be incorporated to decide a retiring teacher’s final annual salary. KRS 161.623 dictates this be done by dividing the teacher’s salary in the final year he or she worked “by one hundred eighty-five (185) days.”
  • The final year’s salary in Daviess County of $64,248 divided by 185 days reveals per-day pay of $347.29. Teachers who accumulate half – or 150 – of those days at the end of their career boost their pensions by $15,628, giving them annual retirement payments of $68,409, or $5,701 monthly.
  • None of this even includes the annual cost-of-living increases (COLAs) and rich, but nearly free, health-care benefits KTRS recipients receive.
  • “But we don’t get Social Security,” I can hear even now as fists shake faster and angrier. True. I will have some thoughts in a future column on how to remedy that policy in favor of KTRS and the taxpayers.

This brief mathematical study shows that Daviess County teachers who save even half of their sick days will receive more in gross pension benefits during their first year of retirement than in the final year they worked.

If they fulfill their life expectancy, they will amass more than $2.1 million in taxpayer-backed retirement bucks – plus tens of thousands of additional dollars in the form of health-insurance benefits and COLAs for a lifetime. (Those benefits are not even included in the above numbers.)

The burden of a system allowing teachers – or any public worker, for that matter – to retire in their mid-fifties and collect hefty public-pension, health care and cost-of-living checks is funded by taxpayers struggling to make ends meet in their own homes, and who, if they even have a retirement plan, are largely funding it themselves.

Plus, they’re certainly working more than 185 days a year.

Who should be angry here?

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon: Pension Grinch likely to pilfer more from taxpayers

BluegrassBeaconLogoThe more we hear from experts on Kentucky’s pension crisis, the clearer it becomes: no Black-Friday-type-of-deal exists to bail out the state’s retirement systems, which face a nearly $40 billion unfunded liability.

But Santa made an early visit this year to Kentucky Retirement Systems’ executive director Bill Thielen, whose board paid $38,500 to a Colorado search firm to find a replacement for Thielen, who previously announced he would retire at the end of 2015.

Not only were none – none – of the 20 applicants interviewed, the board decided in October to offer Thielen a contract extension, keeping him on the job until June 30, 2018, and hiking his salary by more than $43,000 a year.

There’s more irony in this situation than snow at the North Pole.

Thielen gets a 25-percent raise to lead a system that includes the Kentucky Employees Retirement System, which has only 17 percent of the funding needed to meet its future obligations to pensioners.

Thielen’s mammoth pay hike also stands in stark contrast to state workers who received a 1-percent raise this year.

Despite the fact that KERS is drowning to the point that it’s now cashing out investments to pay its pensioners, Thielen gets an extra present – a big increase in his own pension.

Kentucky Roll Call’s Lowell Reese estimates that considering Thielen’s age, life expectancy and long tenure in government, the KRS board not only gave Thielen a hefty raise, it essentially awarded him a quarter-million dollar bonus over his lifetime by spiking his pension.

So basically, he’ll get an additional $250,000 for two and a half years of work. Not a bad gig, if you can land it, or – as in Thielen’s case – hold onto it.

Along with that “bonus,” Reese notes that Thielen’s a double-dipper who’s cashing an estimated $66,000 pension check each year from his previous position with the Kentucky League of Cities and will get a projected $49,155 annual pension from his KRS tenure.

It all adds up to $115,000 a year in taxpayer-funded pension payments to the man who leads a secretive operation and who’s made little effort to bring accountability to a system now so out-of-control that it won’t be long before you will hear talk of a tax increase the size of which will dwarf the jolliest Santa or the positive hopes many have for the incoming Bevin administration.

More than $20 billion is needed just to raise all state retirement plans to the 80-percent funding level actuaries claim is healthy.

“Where are you going to get that kind of money?” Reese asks. “You can’t even borrow that. To really fix the problem, it’s going to take a mammoth tax increase unless they come up with a magic plan.”

Representatives of both the state workers’ and teachers’ plans have said they cannot invest their way out of the crisis.

What about growing our way out of it?

The Lexington Herald-Leader’s John Cheves reported during the recent gubernatorial campaign that the additional $579 million in tax revenue that Frankfort is forecast to receive through 2018 “is already more than spoken for.”

How can Kentucky’s economy grow big – and fast – enough to bring in sufficient revenue to rescue our pension system when there already are so many hands out clamoring for more funding that the surplus revenue will disappear faster than the Freedom From Religion Foundation can say “Merry Christmas?”

“Public pensions for state workers and school teachers might need a stepped-up $2 billion just to stay afloat,” Cheves reported. “And Kentucky will have to begin paying its share of expanded Medicaid, starting with an estimated $247 million.”

Taxpayers should dare Speaker Greg Stumbo or his fellow dinosaur-ic Democrats who still control the Kentucky House to talk taxes and new programs while at the same time opposing Bevin’s plan to shine the bright light of transparency on pension spending and investment practices along with implementing business-friendly policies like right-to-work and real tax reform to attract job creators who could provide at least some of that needed magic.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Quote of the Day: Is Kentucky bankrupt?

“What do I think of the new rules? I welcome anything that increases transparency at public pension funds but at the end of the day, these new rules will only highlight the looming catastrophe that awaits U.S. public pension plans.

“Illinois and Kentucky are already bankrupt, never mind these new rules. No matter what they do, they can’t invest their way out of their hole. They’re pretty much cooked and will need to lower benefits, raise contributions, raise the retirement age or go the way of Detroit and implement the silly hybrid plan.

–Pension Pulse on new government accounting standards that will require future pension costs to be included on balance sheets and change how they must calculate their underfunding. Read more about Kentucky’s unfunded pension liability and free-market solutions to address the commonwealth’s public pension crisis here.

 

 

 

More secrecy: Kentucky’s public pension system refuses to shine the light on its investment practices

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Two recent examples of government secrecy show that Kentucky is a long way from having the kind of transparency in its government institutions that will bring real accountability to taxpayers footing the bill:

Not only are the double-and-triple dippers in Kentucky’s public pension system protected from public scrutiny, so are its investment practices.

The Kentucky Retirement Systems — which provides pension and health-care benefits for more than 340,000 present and future pubic retirees — recently denied an Open Records Act request by the Lexington Herald-Leader seeking information on the fees the system paid in 2013 to individual investment managers. This even though the KRS reported investment that fell way short of its benchmarks and promised 7.75 percent rate of return.

Government-types want you to think this issue is too complicated for the average citizen to understand, and that releasing information on the tens of millions of dollars that went to the managers of risky investment funds and their managers would somehow or other hurt the system.

But actually, it seems to be the secrecy that is harming the system. Today’s Lexington Herald-Leader offers some recent examples of how that is happening.

The Bluegrass Institute continues to promote transparency in all aspects of the public pension system,including the policy in Rep. Jim Wayne’s bill during the 2014 session of the Kentucky General Assembly that would have shed the light on KRS investments and would ban questionable practices such as placement agents — which have made tens of millions of dollars off Kentucky retirement investment funds, even when those funds did not perform at promised levels.

 

 

Bluegrass Beacon: ‘Taxpayer-eaters’ meet ‘self-serving-politician-eaters’

What some candidates could gain in this year’s BluegrassBeaconLogoelection – beyond just winning office – is a stark reminder of how wrong political leaders were when declaring last year that they had adequately addressed Kentucky’s public-pension crisis.

Instead, legislators with serious courage deficiencies failed to agree on reforms beyond what they believe are “politically feasible.”

While the legislature did place future public workers in a hybrid cash-balance plan, they didn’t ensure significant savings would accrue by also limiting expenditures, including benefit creep – a huge contributor to the Kentucky Retirement System’s ailments.

Lawmakers also failed to touch the system’s most immoral practice – allowing its incumbent members to personally benefit from voting for a pension-spiking bill.

Kentucky Roll Call publisher Lowell Reese estimates state taxpayers will fork over an estimated $735,000 in additional – yes, additional – legislative pension benefits to Sen. Walter Blevins Jr., D-Morehead, if he wins this year’s election for Rowan County Judge-Executive.

Blevins beat out five other candidates to win the May 20 primary election.

A review of Blevins’ three decades in Frankfort – he was first elected in the early 1980s when Hall and Oates’ “Maneater” was a hit song – reveals a penchant for being a “taxpayer-eater,” and not just because of the big expense tabs he’s run up in what the commonwealth’s founders created as a part-time position. (The Morehead News reports that Blevins in 2012 was reimbursed nearly $40,000 for expenses alone in addition to his salary. Hey, it’s a great gig if you can get it.)

Blevins is hoping to get an even better taxpayer-funded engagement as judge-executive. If he ultimately wins the seat, state law requires him to resign his Senate seat before taking the oath of office as a county official.

I doubt he’ll mind.

Along with pocketing an $87,000 salary, Blevins will be enrolled in the County Employees Retirement System, which will make him a triple dipper as he then will be collecting taxpayer-funded pension checks from not one, not two, but three of Kentucky’s six public-retirement funds.

This is how it works for Blevins:

  • He’s been in the legislature so long that he’s “maxed out” on his legislative pension, meaning he reached the threshold where that pension would be 100 percent of his pay – about $41,000 annually – as a state politician.
  • When he “maxed out” his legislative pension, Blevins was automatically enrolled in a second pension system: the Kentucky Employees Retirement System. Despite the fact that the KERS is in danger of becoming insolvent, part-time politicians like Blevins still get thousands of additional dollars throughout their lifetime just from this pension system alone.

However, if you think taxpayers are getting off the hook with a $41,000 pension check here or a $5,000 retirement check there, then you might consider, as Hall and Oates wondered: “What do you think you’re getting for free?”

House Bill 299 passed in 2005 would allow Blevins, should he win, to figure his legislative pension based on his judge-executive salary rather than limiting it to what he raked in during his General Assembly tenure. Reese notes that taxpayers as a result would shell out twice as much in legislative pension benefits for Blevins than if HB 299 had not passed.

The worst part: Blevins was one of 30 state senators who voted for that pension-padding policy, making him a personal – and greedy – beneficiary of his own vote.

If you combine all of Blevins’ pension checks, should he win the judge-executive’s race, taxpayers will fill this one politician’s golden parachute with nearly $1 million – just because he managed to hang around for so damn long.

Hall and Oates crooned about a “she-cat” that they were “watching and waiting, oh-oh, here she comes.”

We’re “watching and waiting,” too: to see if they, the voters, “come” – and become – “self-serving-politician-eaters.”

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Not-so-fun-facts about Kentucky’s teachers’ pension plans

Did you know…did_you_know_007_2169721

  • Kentucky has the highest early-retiree (pre-65) public pension costs of any other state in the country?
  • For each teacher that retires before turning 65, Kentucky taxpayers will be billed a total of nearly $800,000?
  • Kentucky Teachers Retirement Systems (KTRS) was 61 percent funded in 2011, but fell more than a whole three points just one year later to 57 percent funded?
  • Kentucky has the seventh lowest funded public pension for teachers in the nation?

If Kentucky teachers are to be ensured the type of retirement they’ve earned through their years of hard work shaping the future of the Bluegrass State, fundamental reform must be made to KTRS. In an era of longer life-expectancy and volatile capital markets, our elected officials must raise the retirement age to be eligible for taxpayer-funded public pensions, and establish the type of pension plan that has been tried and true in the private sector: defined-contribution plans.

As Jim Waters, President of the Bluegrass Institute, put it in his most recent Bluegrass Beacon column,

“Though legislators during the 2013 legislative session did take baby steps in the direction of the proven market alternative by establishing limited “hybrid plans,” they refused to take the kind of bold stride that would guarantee total employer-employee contributions toward retirement. Instead, public workers continue to languish in an illusory world that absolutely guarantees rich benefits in the unknown – and uncertain – future.”