By Jacqueline Pitts, The Bottom Line
FRANKFORT, Ky. — After a bill seeking to allow state universities and other government entities to exit the state’s ailing pension system as well as freeze the rate they are paying to the system was vetoed by the governor in April, Gov. Matt Bevin announced Monday he is calling legislators back to Frankfort for a special session beginning at 8 a.m. Friday to address the issue.
In his veto message, Bevin stated while he appreciated the efforts of the General Assembly on this difficult issue, “we can do better” and added he intended to call a special session to address the topic before July 1, 2019.
The session was not called before July 1 because the proposal put forth by the governor on the issue lacked enough votes in the House to pass.
“House Majority Caucus members have devoted more than two months to studying the details of the Governor’s proposal, and gathering feedback from stakeholders. We are ready to act on this bill in order to provide relief to quasi-governmental agencies, regional universities, their employees and the Kentuckians they serve. We remain committed to working towards the ultimate closure of this issue, during this special session and into future sessions,” Speaker David Osborne said. “The public pension crisis was not created overnight. It is the result of decades of mismanagement and policies that favored politics over the long-term good of our Commonwealth. It will take a real, long-term commitment to resolving it.”
Bevin vetoed the original bill because there were incorrect dates as well as provisions he says were illegal and would have kept individuals from getting their pensions if their employer was unable to make their payments into the retirement system. The proposal the governor put forward is very similar to the bill that passed during the 2019 session with those items fixed.
The proposal will give the state’s regional universities a way to exit the Kentucky Retirement System (KRS) and pay off their liabilities over a set number of years and move their new hires into a 401(k)-style plan while also freezing their employer contribution rates ay 49 percent of pay.
Because the session was not called before July 1, the rates of those entities rose to the 84 percent rate paid by others in the system. However, Gov. Bevin told The Bottom Line last week the payments would not be due until August and the rate increase could be reversed if they pass a solution by the end of the month.
July 19 was floated as the potential date of the special session last week as it is the time that works best with the schedules of most legislators because of “vacations, mission trips, legislative conferences and other events.”
Since legislators will begin on Friday, it is likely they will also come into session on Saturday and then reconvene on Monday as they cannot meet on Sundays. A special session, because of the number of readings required in each legislative chamber, typically takes five days.
Learn more about the original bill and what it would do here.
Read and watch Gov. Bevin’s comments about the special session in an interview with The Bottom Line’s Jacqueline Pitts last week here.