Earlier this evening, Senator Joe Bowen (R, Owensboro) filed Senate Bill 1, the much anticipated pension reform bill that seeks to put Kentucky on a path to fiscal solvency and benefit sustainability. The following press release was issued (the links to the bill and a section-by-section summary is at the bottom):
SENATOR JOE BOWEN FILES PENSION REFORM MEASURE AS SENATE BILL 1
FRANKFORT, Ky. (February 20, 2018) – State Senator Joe Bowen (R-Owensboro) on Tuesday filed Senate Bill (SB) 1, representing the highly anticipated pension reform proposal from the Senate Majority Caucus. SB 1 contains significant changes from the initial pension reform proposal released in October of 2017.
Senate Bill 1 would not force any current or future state employees or teachers into a defined contribution (401(k)-style) retirement plan. It also would not require all employees and teachers to pay an extra three percent of their salary for a retiree health benefit. And, the bill does not create an incentive for employees and teachers to retire at their earliest possible eligibility by ending the ability to accrue more service credit in their current defined benefit plan.
“We are committed to funding our plan, meeting our obligations to state employees, and to making systemic reforms to ensure these systems will be financially sound for current and future employees,” Senate President Robert Stivers (R-Manchester) said. “When this bill passes, we will over time eliminate the unfunded liability that has been estimated to be as much as $60 billion.”
“When a pension reform proposal was first released in the fall of 2017, there were several issues raised by teacher groups, state employees, retirees, and taxpayers,” House Speaker Pro Tem David Osborne (R-Prospect) said. “This plan is our attempt to address many of those issues brought to us. We listened to the concerns, and this bill represents a compromise that will bring our pension systems to the appropriate funding levels over a 30-year period.”
“This bill represents countless hours of work by countless individuals that will directly address the unfunded liability in Kentucky’s ailing pension systems,” Bowen said. “We listened to key stakeholders, experts, and taxpayers, and we are confident our new plan balances the need to stabilize the system while honoring the commitments we have made.”
To access Senate Bill 1 in full, please visit www.lrc.ky.gov.