The consulting firm hired to analyze Kentucky’s troubled public pension plans reported their recommendations last week, and the results were worse than many state workers and retirees had feared.
The journalists on KET’s Comment on Kentucky reviewed several key options the consultants presented for resolving the unfunded liabilities in the state retirement systems. They also discussed recent education stories and other news from around the commonwealth.
Pension Recommendations Stoke Fears
Last Monday representatives of PFM Group delivered their recommendations to the Public Pension Oversight Board. Daniel Desrochers of the Lexington Herald-Leader says the biggest change the consultants suggested was to rescind cost-of-living adjustments that had been awarded to retirees between 1996 and 2012. He says that means future benefit payments to retirees could be lower than they are used to receiving. The consultants also said future COLAs for retired teachers would be suspended until funding in the Kentucky Teachers’ Retirement System (KTRS) is stabilized, Desrochers says.
Other recommendations included raising the retirement age for state employees. Hazardous duty workers like firefighters and police officers would have to work to age 60, and other state employees to age 65. The consultants also said most new state employees should be placed into a 401(k)-style retirement plan; new teacher hires would be eligible for a 401(k)-type plan and Social Security.
Desrochers says clawing back the COLAs would immediately reduce the unfunded liabilities in the pension plans. Shifting new employees to 401(k) plans wouldn’t save the state money until 2046.
State House members met in a closed-door session to review the consultant’s recommendations. Adam Beam of the Associated Press says that meeting should have been open to the public since it was the first time lawmakers discussed the pension options. He says Rep. Jim Wayne (D-Louisville) made a motion to open the meeting, but it was defeated. Beam says Wayne then left the meeting in protest.
House Speaker Jeff Hoover (R-Jamestown) told reporters later that legislators were more comfortable discussing the recommendations in private. Beam says Hoover admitted that members objected to some of the pension options, but declined to say which ones. He adds that a reform bill will not contain an emergency clause, so any changes made to the pension plans wouldn’t take effect until several months after any legislation is passed.
State officials fear there could be rush of public employees and teachers filing for retirement before lawmakers enact any changes. Desrochers says the Kentucky Retirement Systems doesn’t have enough staff to handle all the requests they’re getting from state workers who want to discuss their retirement options. Beam says Education Commissioner Stephen Pruitt issued a video imploring teachers not to retire until they get more information about what changes might actually be enacted.
The Kentucky Employees Retirement System reports a 20 percent increase in people retiring in August 2017 over August 2016, according to Desrochers. He says there’s some belief that an employee’s benefits might be better protected if they’re already retired at the time legislators make any changes.
Later in the week Gov. Matt Bevin held a question and answer session on Facebook for state employees. Beam says the governor was asked about the potential for a mass exodus of public school teachers, thousands of whom are now eligible for retirement. Bevin said any teacher who would leave their classroom in the middle of the school year out of their self-interest should retire. The governor went on to say that he knows most teachers don’t feel that way, but Beam says the comment still rankled many educators. He says Bevin later released another video to explain that saving KTRS is very personal for him because several of his family members have been teachers.
Beam says there still is no timeframe for a special legislative session on pension reform. He says Speaker Hoover warned that it will take a month for legislative staff to draft a reform bill, and then he wants to give his members another month to study the measure. So the earliest lawmakers could convene would be in November, Beam says.
Education Commissioner Pruitt has proposed a new rating system for measuring the performance of Kentucky’s public schools. Kirsten Clark of the Louisville Courier-Journal says the new five-star scale will be based on a variety of indicators including standardized test scores as well as school climate and culture, and opportunities available for students. Pruitt contends that the system will give a more rounded view of school performance, according to Clark. Top schools will earn five stars under the proposed system.
Students at Louisville’s St. Agnes School plan to lobby the 2018 General Assembly to approve a ban on corporal punishment in the state’s schools. Clark says 25 districts still permit paddling for punishment. She says the greatest concentration of those schools is in eastern Kentucky. Nineteen states across the nation allow corporal punishment at school.
School board members in Jefferson County are re-evaluating the use of so-called “resource officers” to provide security in Metro Louisville schools. Clark says there’s a concern that the presence of these armed officers may contribute to more punishments for minority and disabled students. She says several school board members have questioned whether the money spent to hire off-duty police officers might be better spent on mental health counselors for students.
And students at the Kentucky School for the Blind got to experience the recent solar eclipse along with their sighted counterparts. Clark says the American Printing House for the Blind prototyped a new technology that allows a visual image captured by a camera to be depicted on a grid of raised and lowered pins. Visually impaired students got to use the device to feel with their fingertips the progress of the eclipse as it occurred.
Other State News
A federal grand jury in Lexington indicted James F. Sullivan for allegedly paying bribes to former state official Timothy Longmeyer. Beam says Sullivan allegedly gave Longmeyer $9,000 while he was secretary of the state Personnel Cabinet under Gov. Steve Beshear. Sullivan is alleged to have also paid Longmeyer $1,000 while he was working for current state Attorney General Andy Beshear.
Beam says Republicans have tried to connect Beshear to the Longmeyer scandal and this may give them the ammunition to do that. But Beam says Longmeyer allegedly accepted the $1,000 payment just days before he was indicted and resigned from the attorney general’s office. So it appears that Longmeyer may have already been working with federal investigators, according to Beam.
African American leaders from around the commonwealth rallied in Frankfort last week to renew their call to remove the statue of Confederate President Jefferson Davis from the Capitol Rotunda. Beam says this is the third time in the past 15 years activists have sought the removal of the statue.
In 2015, the state Historic Properties Advisory Commission voted 7 to 2 to keep the statue but also add interpretative materials to provide greater details about Davis’ role in the Civil War and as a slaveholder. At that time, Matt Bevin, who was then a candidate for governor, said the statue should be removed. Beam says the governor recently retreated from that stance, saying the commission should decide the issue.
Lexington Mayor Jim Gray wants the city’s main cemetery to take statues of two Confederate figures that are slated for removal from the old Fayette County Courthouse grounds. Desrochers says Gray thinks the cemetery is an appropriate venue for the likenesses of John Hunt Morgan and John Breckinridge since the two men are buried there. Even if the cemetery board votes to accept the statues, the Kentucky Military Heritage Commission must still approve the relocation plan.
The opinions expressed on Comment on Kentucky and in this program synopsis are the responsibility of the participants and do not necessarily reflect those of KET.