Bevin signs pension-relief bill; special session comes to a close

Governor Matt Bevin signs pension-relief bill on final day of special session

FRANKFORT, Ky. (WAVE) - Kentucky Gov. Matt Bevin's special session is now over.

The quasi-government pension relief bill he laid out survived the full, five-day process with no changes.

The governor’s call for a session included a severability clause that stated if any parts of his request were challenged, the whole piece of legislation could be struck down.

Both House and Senate GOP leaders adhered to that strict proclamation.

The House narrowly passed House Bill 1, the governor’s plan, on Monday. On Wednesday, the Senate passed the bill with a little more ease.

Some Republicans voted against the Bevin-backed measure in both chambers.

The bill freezes the employer-contribution rate at 49 percent for a year, instead of an 84-percent rate that went into effect this month.

During that time, agencies would have to decide to stay in the pension system and face higher future contribution rates, which could cripple some employers, or pay their way out of the system up front or in differing installment plans, and enter a 401(k)-style-defined contribution plan instead.

Some are concerned that puts more employees into retirement plans that could crumble under market volatility.

Kentucky’s quasi-agencies include around 9,000 employees of regional universities, health departments, domestic violence centers and some community and public health centers.

Democratic plans didn’t get off the ground during the session. Democratic bills made it to a House committee and amendments were heard on the Senate floor. All of those attempts failed.

Opponents of HB 1 criticized it for violating the inviolable contract, ignoring the separation of powers and being the first step toward privatizing public pensions, saying other public workers could be next.

Republicans, again, said Wednesday that’s not true, and called such rhetoric dangerous.

Senate Majority leaders added the bill was needed to save the pension system; some employers asked for it, and they passed independently.

“I’ll go back to one of the first things I said: If you don’t believe I have the independence to adjourn the session Sine Die, go back to December,” said Senate President Robert Stivers (R), referencing a previous special session where the legislature didn’t follow the call of the governor, but instead gaveled out without passing any bills.

Democratic Senate leadership noted the legislation could face a legal challenge, which could invalidate the bill, leaving quasis with crippling costs.

“If any part of this bill doesn’t survive legal scrutiny, then the whole bill fails,” said Sen. Morgan McGarvey (D), the Minority Floor Leader. “That’s not the approach we should’ve taken. That’s why we need more time and more debate.”

Bevin signed the bill during a ceremony Wednesday afternoon, echoing the words of his Republican colleagues, claiming this is not the beginning of the end for other public pensions.

“That’s childish, actually, to be that kind of a fear mongerer,” Bevin said. “To say they’re coming for you next, are they afraid that someone is going to save their pension, too, going to help them retire with dignity, too? What is it they’re afraid of?”

The bill goes into affect immediately, but employers can’t elect to leave the pension system until April.

Lawmakers will be back for the 2020 legislative session in January. They could make changes to what they did during the special session at that time.

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