Senate President Robert Stivers (R-Manchester), House Speaker Pro Tem David Osborne (R-Prospect), and Public Pension Oversight Board Co-Chair Sen. Joe Bowen (R-Owensboro) explain details of Senate Bill 1, the pension reform legislation introduced on Tuesday.
The lawmakers discuss the release of the financial analysis of the proposal, capping of employee sick days, the hybrid cash balance plan for newly hired teachers, employee payments to retiree health care, and changes to cost-of-living adjustments for teachers. They also explain why they rejected Gov. Matt Bevin’s proposal to move new hires into a defined-contribution plan.
Osborne says the measure is estimated to save the commonwealth $4.8 billion over the 30 years it’s expected to take to resolve the unfunded liabilities in the public employee and teacher retirement plans. Stivers says the proposal won’t affect the state budget lawmakers are currently drafting, but it will impact the budget in future years as systemic changes to the pension systems begin to be implemented.
Bowen, who is sponsor of the measure, says taxpayers will no longer assume all the risk of keeping the pension systems afloat. He says the bill is the result of countless hours of work by lawmakers, numerous reviews by actuaries, and concessions granted to groups representing current employees and retirees. Bowen also says he doesn’t expect lawmakers to make any major changes to the bill as it moves through the legislature.
“This is a good product,” Bowen says. “I for one don’t think anybody can really find any fault with what we’ve done because we have in some measure taken all of their concerns and molded it into this product that we currently have, so I don’t think there is a lot of wiggle-room left.”