Beshear to offer separate plan for pension reform

This from Jack Brammer at the Herald-Leader:

FRANKFORT --About 432,000 state employees, teachers and retirees will have to wait to learn Gov. Steve Beshear's plan to address an $18 billion shortfall in the public retirement systems, but he will not be issuing bonds to solve the problem.

Beshear said Tuesday night during his budget address that he "will offer a specific proposal on pension reform in the coming weeks, and I look forward to working with you as we resolve this critical problem." ...

..."What we can do now is address the increasing costs," he said. "These programs are not sustainable at current levels."

If the shortfall is not addressed, the pension funds face bankruptcy in 14 years. State retirees would get no pension checks and would have to pay for health care.

Fletcher: special session may not include pensions

Gov. Ernie Fletcher said this morning that he still wants to call a special session for some spending items and other priorities but may not put the bailout of state pension systems on the agenda.“We’re assessing which things we would put on a special session,” Fletcher said in a breakfast speech to a business group called the Lexington Forum. “I’m not ruling out calling one even before the primary at this point.”

...On Wednesday Fletcher appointed members of a task force to study the unfunded liabilities of retirement systems for state and local government workers and teachers and make recommendations by Dec. 1.

This from the Courier-Journal.

Conference Committee Working to Resolve Pension Differences

Rep. Carl Rollins, D-Midway; Rep. Derrick Graham, D-Frankfort; and Sen. Julian Carroll, D-Frankfort, were appointed to the conference committee to resolve differences on the pension bill.

A Senate committee substitute to HB 418, which was sponsored by Graham, proposed a $533 million bond issue to make the state retirement systems whole. The House refused to concur with the changes, and the Senate refused to acquiesce. The proposal also included a proposed "hybrid" benefit plan that would include both a defined-benefit and a defined-contribution plan, similar to a 401 (k) or IRA fund.

Rollins said he would support the bond issue but not the proposed benefit changes. "It would be really bad for future state employees, really bad for Franklin County and bad for the state of Kentucky," he said. Carroll said an analysis by staff from the Legislative Research Commission shows the unfunded liability will grow from $500 million to more than $2.2 billion in just five years. He said its important to anticipate the problem and try to find a solution before it becomes a crisis. "Its almost as if were just standing on the tracks as we see the train coming," Carroll said.

"It greatly disturbs me." Graham said a special session could be necessary if the House and Senate reach an impasse. Gov. Ernie Fletcher said he would call a special session if the issue cannot be resolved.

See the State Journal article.