FRANKFORT, KY (WAVE) - Gov. Matt Bevin (R-KY) unveiled "Keeping the Promise," a comprehensive plan addressing Kentucky's multi-billion dollar public pension problem.
If passed, the plan would legally require state lawmakers to fully fund state pensions each budget year and follow and a new formula that mandates hundreds of millions more into every retirement plan.
Bevin said the process of eliminating the shortfall will take 34 years. He said state employees should support the proposal.
"Any retiree in any state would want to have a bill like this because it guarantees by law your pension is going to be funded," Bevin said. "It will be no more kicking of the can down the road… It is going to mandate by statute that this be funded."
Members of the governor's staff asked WAVE 3 News to leave an "off-the-record briefing by the Governor's budget director Wednesday afternoon after raising objections over rules the Governor's Office imposed limiting transparency.
A public presentation from the Governor Wednesday morning laid out the highlights. Some of the most notable points of the plan did not follow some controversial recommendations previously published by consultants.
Under the proposal, no current retirees will see cuts to their pension checks or health care plans and the state will not raise the retirement age.
Proposed changes vary according to the different state retirement plans. Workers designated as "Tier 1" and "Tier 2" employees can maintain their current pension plans until they reach 27 years of service. At that point, they will be required to switch to a retirement plan similar to a 401-K. "Tier 3" employees will immediately roll over into a plan similar to a 401-K.
Hazardous duty employees, including police and firefighters both new hires and veterans, will see no changes to their current pension plan.
Bevin's pension proposal calls for changes to current policies that allow employees to use sick leave to enhance retirement benefits. Non-hazardous duty employees will no longer be allowed to draw a pension while drawing a paycheck from another state job. The practice is often referred to as "double-dipping."
Changes for state teachers also include a plan similar to a 401K. This applies to new hires and employees with more than 27 years experience. Teachers with less than five years on the job have the option to switch to the new plan. Bevin said teachers would be allowed to contribute 10% of their salary and the state would contribute 8%. Bevin called the plan "generous."
The Governor did not say how the state will pay for the proposals or where cuts might have to be made. Bevin said he is not ready to schedule a special legislative session to enact the pension proposals.