Mayor: Compromise plan strengthens pension, restores city’s financial health
FRANKFORT, Ky. (March 8, 2013) – The Kentucky Senate on Thursday approved a bill to comprehensively reform Lexington’s police and fire pension fund. The bill will now be sent to Gov. Steve Beshear to be signed into law.
“This is a remarkable day for Lexington,” said Mayor Jim Gray, who thanked the legislators. “Once the governor signs this legislation, we’ve solved the biggest fiscal problem facing the city. Our city’s financial health will be restored for the long-term.”
House Bill 430 immediately cuts the pension fund’s $296 million unfunded liability almost in half to $161 million.
“I am thrilled that we finally have achieved a bipartisan consensus on HB 430,” said Sen. Alice Forgy Kerr of Lexington. “This bill will serve to strengthen community ties and protect the retirement of our first responders.”
The pension bill was unanimously approved by the House on Feb. 25.
Of the 1,487 retired and active police officers and firefighters who voted on the proposal, 76 percent supported it.
“This compromise on our pension came out of necessity to protect our pension,” said Capt. Chris Bartley, President of Local 526, International Association of Fire Fighters. “Our firefighters and police officers have earned and paid large sums of their own money into the fund and this bill provides a defined benefit and a dignified retirement since we do not get Social Security like the rest of the general public.
“This is a comprehensive, honest and responsible way to put our police and fire pension system on an affordable, sustainable path while preserving a dignified retirement for our police officers and firefighters,” Gray said. “Across the country, cities and states are wrestling with pension reform. In Lexington we have found a solution through compromise.”
The bill includes lower annual cost-of-living adjustments, increased contributions from active and future employees and a remodeled new-hire plan. The city has agreed to increase its payments to the Policemen’s and Firefighters’ Retirement Fund by $9 million a year and bind itself to paying down the unfunded liability over 30 years.