Brakes put on bill separating county retirement systems from state pension system…
Date: 03-03-2017 — The brakes were put on a bill that would separate the County Employees Retirement System from the Kentucky Employees Retirement Systems Thursday, but Gov. Matt Bevin said it would most likely be addressed in a special legislative session this year.
Sen. Joe Bowen, R-Owensboro, the bill’s sponsor, joined Bevin at a press conference at the Capitol. Both said they wanted to wait on the pending audit of the entire state pension system and would continue vetting the bill further.
Under the bill’s provisions, the County Employees Retirement System (CERS) would have its own nine-member board.
Three members would be elected with additional members from the Kentucky League of Cities, the Kentucky Association of Counties or the Kentucky School Boards Association who must have 10 years of investment experience.
The bill would also allow the legislature to suspend or reduce annual cost-of-living increases as a benefit not protected under the inviolable contract previously given as a benefit from Aug. 1, 1996, to July 1, 2008.
Bowen likened the bill to a vehicle in a snowbank: If he tried to spin the wheels too fast, it wouldn’t get out of the nation’s most ailing pension system.
“If you sit there and spin your wheels, you aren’t going to get out,” Bowen said. “But if you turn them real slow, you’ll climb right out of that snowbank. We are giving it (the bill) a real chance. The last thing I want is an important bill to be caught up in a short session. This is the right way to go. It’s going to be a part of a broader conversation.”
Once the numbers are in from the audit, Bevin said, if it is determined to be the best way forward — separating CERS from the KERS system — “that’s what we’re going to do. We had hoped we would be further down the road. What we do know has led us to this situation.”
Bevin said the bill will be part of a special session along with tackling the ailing pension systems and tax reform.
“Most of the assets in the KRS system are held by CERS. Their funding level is better. From that standpoint, they don’t want to part of a muddled system,” Bowen said. “Quite frankly, I agree.”
CERS is funded at about 59 percent compared to KERS’ nonhazardous fund, which is funded at about 16 percent.
Jim Carroll, spokesman for the Kentucky Government Retirees group, issued a statement saying the group appreciated Bevin’s prudent position on the bill.
“A precedence has been established for pension reform,” Carroll’s statement said. “Kentucky Government Retirees would welcome the opportunity to partner with all other stakeholder organizations in a public forum to participate in a similar process in advance of a special session.”
By Brad Bowman
The State Journal
