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Regional universities send letter supporting Bevin’s proposed pension bill; questions remain

By Tom Latek
Kentucky Today

Gov. Matt Bevin has received support for his proposed pension reform bill from one of the groups who would be affected the most if it passes.

A letter has been sent to all members of the General Assembly, signed by six of the seven presidents of Kentucky’s regional public universities, as well as the president of the Council on Postsecondary Education, urging them to pass the legislation during a special session the governor plans to call later this month.

“Governor Bevin’s staff met with stakeholders from Kentucky’s comprehensive universities and KCTCS earlier this week,” the letter states.

“He carefully explained the framework of this legislation and seeks input about how this legislation will impact our institutions. After considering the information shared in this briefing and reading the legislation, we endorse it and urge passage, should an extraordinary session be called.”

They note that they advocated passage of House Bill 358 during the 2019 regular session. 

“It is a piece of legislation that represented our response to the mandate that represented our response to the mandate by the General Assembly to bring forward a viable solution to the looming Kentucky Employees Retirement System crisis.”

“Failing to do so will result in disastrous consequences for our students and employees. I will significantly reduce our ability to educate the next generation of Kentucky leaders and produce graduates who are powering Kentucky communities.”

Bevin vetoed HB 358, which passed on the last day of the session, preventing lawmakers from taking a vote to override the veto.

In his veto message, Bevin said, “I have stated repeatedly that we have a moral and legal obligation to protect the benefits earned by our public sector retirees. While I appreciate the work of our legislators who worked diligently to protect the services provided by many quasi-governmental agencies, parts of HB 358 violate both the moral and legal obligations we have to these very retirees.”

Bevin also cited the section of the bill that would halt benefits to retirees if an agency is more than 30 days past due on an installment payment. 

“Under current law, this would include the health care benefits provided to these individuals,” Bevin wrote.  “This is not acceptable.”

Bevin said he wants to protect the quasi-governmental agencies; including the universities, local health departments and others; from potential insolvency due to the doubling of employer contributions to the pension systems.  

“These entities provide critical services throughout the commonwealth,” Bevin said.  “It is paramount that their services remain uninterrupted. By having ignored the true costs of pension obligations for so many years, the risk to service interruptions is now very real.”

The governor also noted there were errors in dates and other mistakes in the bill and since he doesn’t have line-item veto power in anything other than appropriations bills, he had no choice but to veto it.

Like HB 358, the proposal allows agencies the option of either staying in the system, leaving by making a lump sum payment of their unfunded liability, or paying off their debt in installments over 30 years. But this version bases any payments on how the agencies decide to handle employees hired before 2013.

There is still no consensus on a final bill. Republicans told reporters after a closed-door briefing by the governor’s staff earlier this week, that they had a lot of questions.

The governor’s staff held a telephone briefing for House Democratic leaders before they were given the bill and associated documents, so the leaders have requested an in-person briefing, which is expected to take place on Monday.

While the university presidents expressed support for the bill, Kentucky Government Retirees and the Kentucky Public Pension Coalition have come out opposed to the proposal.

A special session would cost taxpayers more than $66,000 per day, according to the Legislative Research Commission.

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