Commentary: “Keeping the Promise” helps current employees but meets obligations to already retired

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By Governor Matt Bevin, Senate President Robert Stivers, and House Speaker Jeff Hoover
Special to KyForward

“Keeping the Promise,” our plan to save Kentucky’s pension systems, keeps the promise made to Kentucky’s current employees while also meeting the legal and moral obligations we owe to those who have already retired. Promises made are promises kept.

Make no mistake: there will be no changes, clawbacks or reductions to the paychecks of current retirees, and there will be protections for healthcare benefits. That is a promise you can literally take to the bank.

Governor Matt Bevin

This legislature is committed to solving the pension crisis, and is ready to lead by example. Our pension legislation immediately stops the defined benefits plan for all legislators, moving them into the same plan as other state employees under the jurisdiction of the KRS Board. Future elected officials will be required by law to pay the full ARC amount, creating a new funding formula that mandates hundreds of millions more every year into every retirement plan, until they are fully funded.

Looking to the future, the defined benefit plans of current employees and teachers will continue until they reach the promised level of service for their pension, with no increase to the retirement age. As new non-hazardous employees and teachers enter the workforce, they will be enrolled in a defined contribution retirement plan that provides comparable or better retirement benefits. Hazardous employees will continue in the same plan they are in now. We are also closing the loophole that has prevented the payment of death benefits for the families of hazardous employees.

“Keeping the Promise” will improve the Commonwealth’s rating with credit agencies. These ratings have steadily declined in recent years specifically due to our unfunded pension burdens.

The right thing to do is often difficult, but we are determined to fix the pension problem. We are doing it in a way that will be of the most benefit to all Kentuckians. This is the most comprehensive and fiscally responsible pension reform plan in the history of the United States. We are confident that the rest of the country will pay close attention to this solution and that it will serve as a prudent model for others to follow.

For those retired, for those working, and for those yet to be hired: we are truly fixing our broken pension systems.

United we stand. Divided we fall.

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13 Comments

  1. Manis Blair says:

    He did not keep a promise for me and my colleagues. Forcing teachers after 27 years into retirement. Taking a pay cut by paying 3% more to fund retirees healthcare. Some promise..the end of public education and passing the buck. I never missed paying my required contribution for 31 years but that doesn’t mean anything to the Republican Party.

  2. Betty Jo Murphy says:

    The 3% more is to fund active not retired teachers healthcare!

  3. Mike says:

    This is not the promise I signed up for 20 years ago. This is not fixing the pension it’s putting us in a worse situation. I’m concerned for my children and grandchildren on who will be teaching them? Nobody is going to college for 6 years to come to a $40,000 job with no security on their retirement and have no SS to fall back on. Plus make them pay back 3% of their salary. Kentucky looses with this proposal!!!

  4. Bill Huff says:

    My lawmakers are reason for pension problems! Long term care staff published in 1994 a book entitled $5 billion & Change telling lawmakers during 1994 they begin to spend more than State collects! During next 23 yrs at least 5 governs presented tax reform to their deaf ears. Meantime LM violated KY Supreme State retirement full funding ruling by reducing funding by $23 million per biennium Taking est. $4.2 Billion from retirement over 11 straight bienniums. Cost ky road fund $3.6 Billion to cover their general fund deficits!

  5. Laura Lewis says:

    FULL retirement is NOT at 27 years, it’s 27 years of service and 55 years of age. If I retire at 27 years, I will be bringing home $400+ LESS a month for the rest of my life. It is not what was promised to teachers. Many of us aren’t ready to retire at 27 years but will feel forced to because of the changes they are making. There will be a mass exodus of teachers and no one to take their place. And there won’t be substitutes either if retired teachers can only sub 100 hours a month.

  6. Gretchen says:

    This is broken promises and theft. It flat out reduces my overall retirement benefits. I paid my fair share to my retirement straight out of my check. The legislature had failed to pay its share, and is proposing to reduce benefits to offset it’s obligations–with no discussion of increased revenue. It delivers an inferior retirement package at a greater expense to taxpayers, and only benefits whomever ends up managing the individual 401k account. Every taxpayers should be appalled.

  7. Sharon Lovell says:

    This plan hurts all Kentucky employees not just educators. Taking my prefunded and mandated COLAs for my 33 years of service for five or more years is not keeping the promise. It’s a 7.5% pay cut and will cost me a great deal. I am not satisfied with this plan that hurts retirees, those currently employed, and future hires. This plan will be detrimental to our children, to our educational system, to our governmental agencies, our Highway departments, our judicial system, and the economic future of Kentucky. This is not sound economic planning. It’s a joke that didn’t work in West Virginia and it will not work in Kentucky.

  8. Lisa says:

    This is NOT a promise kept, it’s a deceptive act of patting yourself on the back because you believe you’re clever and you’ve fooled us. We’re not fooled or foolish! Please stop pretending you have fixed the problem. Create more revenue, and return our stolen/unfunded pension funds.

  9. Gerri Monsour says:

    It will definitely hurt me as a public school teacher. I will turn 55 eight weeks after the July 2023 date and I will not have 30 of years of teaching in. My plan my entire career was to go at least 30 years and age 55 and I will not hit either one of those milestones. I work hard and love my job, now this is my fate? I will receive thousands of dollars less in retirement under this new plan than my sister who was able to retire after age 55 and with 30 years of service under our current pension.

  10. Jim Beward says:

    This is a disaster. We are already paid less than colleagues in neighboring states and they want 3% of our money to fix a problem of the legislature’s doing. Legislative pensions should be suspended until they repay our pension fund. Better yet, legislators should not get a life pension for part-time work. Salary and insurance only.

  11. Virginia Smith says:

    I don’t believe anyone has mentioned yet that current retirees have not gotten a COLA since 2012. So, if we go 5 more years that’s 10 years with no increase in benefits. If you do the math on that for an overall loss of revenue in retirement it is significant. My cost of living has certainly increased without any additional compensation as I was promised.

  12. Travis Burns says:

    This plan does not keep the promise. This plan will cripple the education system in Kentucky. The Commonwealth will not be able to recruit and keep new teachers. Leading to deterioration of our schools. One would think that he is doing this on purpose to get his beloved charter schools. Bevin and the General Assembly need to find a way to fund the pension plan by increasing the state’s revenue. If they do not do this, it is criminal and we need to stand up for what belongs to us.

  13. Amy Newman says:

    You are not keeping the promise! You are putting the burden on the employees who paid their part! You refuse to divert funds for asinine matters such as beautification projects in the state! The money can be found to fully fund the public pensions! You just don’t want to get creative and find it! Then to propose a stinking 401K for new teachers who can’t get social security is a joke! If your goal
    Is to dismantle the public education system in KY, you are well on your way! Also, if our state employees had been working for a private company that did what the government has done to them, the higher ups in the company would have been arrested!!

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