Kentucky pension crisis: Lawmakers discuss pensions amid pleas from government workers

Trenches have been dug, heels are firmly planted, fingers are locked and loaded, ready to point at the most convenient scapegoat — the war over Kentucky’s public pensions has begun.

The first strike came Monday, when a state-paid consulting group, PFM, issued a report recommending drastic changes to the pension plans that cover most of Kentucky’s public employees — retired, active and future.

Lawmakers were quick to point out that the recommendation was just that — a recommendation.

“There’s good ideas in there, I will say there’s a lot of good ideas, some of them may be implemented, some of them may not be,” Bevin said in a Facebook Live video hours after the report. “There’s some that quite frankly I don’t think there will be an appetite for, even though they may be financially appropriate for us to pursue.”

Legislators, the people who will vote on any pension overhaul, have expressed similar reservations about the report, which contained proposals that outraged every subset of government employees in the state.

“The PFM report should be, and I think to a large degree was, not political and now you’re going to introduce politics in the process,” said state Rep. James Kay, D-Versailles. “And there are going to be winners and losers.”

So far, government workers have largely been kept in the dark about what action the legislature might take.

Members of the House of Representatives held a closed-door meeting Tuesday afternoon to discuss the PFM report, shutting the public out of their first discussion about potential changes that might directly affect the pocketbooks of about 500,000 Kentuckians.

Lawmakers said the meeting largely consisted of asking the consultants and state budget director John Chilton questions about the report. Among other things, it recommended raising retirement ages, freezing the pensions of most state and local government workers and pushing them into 401(k)-style retirement plans.

Going forward, a variety of interest groups are poised to battle for the votes of lawmakers.

“I think we’re all hearing from folks,” said House Speaker Jeff Hoover, R-Jamestown. “Look, we’re all concerned about it, it affects every Kentuckian. I said yesterday that this issue is not just about retired workers or retirees it’s not just about current state workers or current teachers. It affects everything with regard to the state budget and it affects every Kentuckian.”

Facebook pages for state government workers and retirees lit up with reaction Monday night to the consultant’s report and Bevin’s video chat. All of the groups have asked members to make their presence felt in Frankfort.

“We are currently in a fight to preserve the retirement benefits so many have been promised and spent a lifetime of service earning,” the Kentucky Fraternal Order of Police said on Facebook. “Please tell your state legislators to protect our pensions.”

The Kentucky Government Retirees group posted a request Tuesday for lawyers to offer suggestions about “how to proceed with evaluating and securing suitable legal counsel.” The group has pledged to fight a recommendation that would take away cost-of-living adjustments given to retirees from 1996 to 2012, a change that would reduce the monthly checks for many in the state.

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Meanwhile, the Save Our Pensions PAC launched a television ad urging people to support pension reform. The group is a 501(c)(4) organization that does not have to reveal its donors to the public, but it is organized by longtime GOP activists.

Part of the reason government workers know little about what might happen to their retirement benefits is because no plan has yet emerged.

Hoover said he expects it will be a couple of weeks before lawmakers can settle on a broad framework for reform. Then staffers would need three to four weeks to draft legislation. Hoover said he then wants to give lawmakers 30 days to study the proposal.

That would push any special legislative session into November, at the earliest.

“I’m hoping that we can make some real progress over the next couple of weeks,” Hoover said. “Now that we have the PFM report we can sit down, obviously there are a lot of things in those recommendations that we just will not do and can not do, but I’m hopeful over the next two or three weeks that we will take those recommendations and sit down and have good discussions and decide what we can do and try to move forward.”

As that process plays out, elected officials expect to get plenty more phone calls from angry retirees.

“It’s going to be difficult to get anything passed because it’s just a difficult issue,” said state Rep. Jason Nemes, R-Louisville. “But I think everybody in the House and the Senate understands the difficulty of this problem and how important it is to address it.”

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