A publication of the Kentucky Center for Public Service Journalism

House members go behind closed doors to discuss controversial public pension proposal

By Tom Latek
Kentucky Today

Kentucky House members got their first look at the consultant’s report on reforming Kentucky’s troubled public pension plan during a two-hour, closed-door meeting in Frankfort on Tuesday.

A report by PFM Group Consulting suggested moving new state government hires to a 401-K type retirement, putting new teachers on the Social Security system, and making those on hazardous duty retirement system wait until the age of 60 before being able to collect benefits. The state’s contract with PFM was for $1.1 million.

House Speaker Jeff Hoover, R-Jamestown, summoned all 100 members to learn the findings, but couldn’t say how many attended. Some were at a committee meeting in Mayfield, Ky.

Reps. James Kay (D-Versailles) and Jason Nemes (R-Louisville) talk in the hallway of the Capitol Annex, before House members met privately on Tuesday, Aug. 29, 2017, to discuss the public pension system. (Kentucky Today/Tom Latek)

One member, Rep. Jim Wayne, D-Louisville, didn’t stay long. Wayne said his motion to open the meeting to the public, since taxpayers funded the study and paid for members to attend, was rejected.

“Speaker Hoover disagreed and wouldn’t even entertain a second for my motion. In light of that, I don’t think it’s right for us to attend the meeting,” Wayne said, so he left. He also won’t be accepting the $166.00 plus expenses he would have been paid for coming to Frankfort.

Hoover explained why the meeting was closed.

“We had the consultants here, so I thought it would be better for the membership to be able to do that in a private meeting, without the opportunity for folks to grandstand politically, and to have a good discussion and answer questions,” said Hoover.

The speaker said the meeting included both the Republican Caucus and the Democratic Caucus, and was held in agreement with Minority Leader Rocky Adkins, D-Sandy Hook.

“I think they understand we’re trying to solve a very serious issue facing Kentucky, and we’re trying to do so in a bi-partisan manner,” Hoover said.

The speaker said it is crucial the pension underfunding is addressed soon.

“This issue is not just about retirees and current state workers and teachers. It affects everything with regard to the state budget, so it affects every Kentuckian,” Hoover said. “I’m hopeful we can make some real progress over the next couple of weeks, now that we have the PFM report.
“Obviously, there are a lot of things in those recommendations that we just cannot and will not do, but I’m hopeful we can sit down and have a good discussion on what we can do.”

Hoover wouldn’t specify what legislators are unwilling to change, but did say new hires could be put on a defined contribution plan, like a 401-K.

Rep. Jason Nemes, R-Louisville, said it’s too early to decide how much of the report should be adopted.

“I want to read the report, which I just got yesterday, then talk with my colleagues on both sides of the aisle, and most importantly, talk to the teachers and state workers in my district,” said Nemes. “It’s going to be tough to get anything passed, because it’s a difficult issue. But I think everybody in the House and Senate understands the difficulty of this problem and how important it is to address it.”

Rep. James Kay, D-Versailles, said there are a lot of tough decisions to make, “but to me, the answer to the problem is the one that created it, and that is funding. We still don’t have enough information on how we’re going to fund this problem.”

Gov. Matt Bevin said he plans to call a special legislation session in October to address the public pension issue.

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