By Tom Loftus
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In this April 3, 2017, file photo, the Senate side of the Capitol is seen in Washington. Republicans in full control of government are on the brink of history-making changes to the nation’s health care system, but “Obamacare” is only half the story _ and many people may not realize that.
(Photo: J. Scott Applewhite, AP)
The General Assembly’s Public Pension Oversight Board gave groups representing public employees and retirees the chance to weigh-in on pension reform Monday. And those groups, as well as a few other organizations, took full advantage of the opportunity.
The board opened its agenda to public comment as lawmakers prepare for a special legislative session that Gov. Matt Bevin said he will call this year to pass pension and tax reforms aimed at bringing under control the huge unfunded liabilities of about $40 billion in Kentucky public pension plans.
Here are excerpts of comments made to the board:
Kentucky Public Retirees President Larry P. Totten: “It has been gratifying to hear the Governor and members of the legislature speak of the Inviolable Contract (that protects current pension benefits) as a ‘moral and legal obligation’ of the commonwealth. On the other hand, it is disheartening to hear it being described publicly as ‘legal handcuffs’… In the real world, handcuffs have keys to unlock them, releasing that which was once bound. I would ask that you not go looking for the keys in discussing public pensions.”
Kentucky Chamber of Commerce Pension Task Force Chair John Gohmann: “Our general view is public retirement benefits should reflect those available in the private sector as much as possible. Private sector employees primarily depend on 401(k) plans and Social Security and must work longer than public employees before retiring. We do recognize, however, that there are legal and ethical guidelines that must be followed regarding public retirement benefits. We wholeheartedly agree with the Governor’s statement that Kentucky must honor the promises made to public retirees. … We believe the best way to develop a clear and certain path forward is through a combination of additional financial investments in the retirement system and benefit changes that are legally sustainable.”
Kentucky Government Retirees President Jim Carroll: PFM Group, the consultant to the Bevin administration, “determined that the benefit structure of Kentucky Retirement Systems had no impact at all on our cash crisis. This conclusion came as no surprise to us. KRS’ own actuary did a similar analysis for the years 2008-14. The primary cause has been underfunding, and benefits were completely irrelevant to driving up liabilities. …There are interest groups claiming that benefits created this crisis and they use this conclusion to call for violating the contract rights of KRS members. We will rely on the experts.”
Kentucky Retired Teachers Association’s President Romanza Johnson: “I suspect you’re reading a multitude of reports and actuarial tables while making decisions about TRS (Teachers Retirement System). I ask you to remember – we’re not just numbers. We are real people. There will be real consequences on our lives from your decisions. … Because we are not eligible for Social Security, our pension is what pays for the roof over our heads, food on the table, electricity, medicine and clothing.”
Kentucky Professional Firefighters President Joe Baer: “A large majority of professional firefighters in Kentucky do not participate in Social Security. …The firefighting profession is very unique. It is extremely taxing on our bodies and requires physical and sometimes mental capabilities that typically are not available once most of us reach our 50s and definitely our 60s. Forcing firefighters to work well past the time at which they are capable would be a huge disservice and danger to the taxpayers and firefighters.”
Kentucky Fraternal Order of Police’s Nicolai Jilek: “Both the Kentucky Sheriff’s Association and the Kentucky Association of Chiefs of Police have stated that recruitment and retention are by far the number one issues they currently face. So at the same time that various communities across the commonwealth have seen dramatic upticks in crime — namely homicides and gun and gang-related violence that we have continued to suffer under a worsening opioid crisis — Kentucky needs to invest properly in its frontline defenders and first responders.”
Kentucky Association of School Superintendents Executive Director Tom Shelton: “Education is an investment, not a cost, and this is part of that investment. … School districts are generally the largest employers in most Kentucky counties and current and former staff provide a huge boost to our economy. … We implore the General Assembly to not negatively impact current retirees or their beneficiaries. We also implore the General Assembly to not negatively impact the benefits earned and expected by current employees.”
More: Nonprofit formed to ‘educate the public’ on state pension crisis
Kentucky Association of Counties and Kentucky League of Cities representatives: Urged approval of separation of the County Employees Retirement System from the Kentucky Retirement Systems and providing for new governance of CERS. “This separation will ensure that the needs of CERS will be met and will help CERS continue on its current path of growth for years to come — while also allowing our legislators to focus their energy on fixing the very real problems that remain with KRS.”
Kentucky Education Association President Stephanie Winkler: “There has been a lot of talk about how teachers can retire too early, and that they should work longer before receiving pension benefits. Over the last few years, the average age of teacher retirees has increased from 54 to 58 … Certainly, some of your members have been very vocal about how structural changes are necessary. But remember your lessons from school: every action has an equal and opposite reaction. … We don’t believe the legislature wants to do anything that could trigger mass teacher retirements.”
Kentucky Transportation Employee Association President T.J. Gilpin: “We believe the answer to our pension problem is tax reform. … Past tax reform studies all showed that Kentucky needed more revenue in order to provide vital services to the taxpayers. … Some have asked, ‘Is it fair to the taxpayers to have to pay more for pensions?’ I will ask, ‘Is it fair to the employees and retirees when money that should have been used for the pensions was spent for other services during all those years that the pension obligations weren’t met?’”
Eastern Kentucky University Vice President David McFaddin: Noted state support for universities has been reduced while pension contributions of regional universities have soared over the past decade. “We do welcome creative and effective solutions to try to address this because it creates great hardships on our campuses. This is not a sustainable trajectory for any of the postsecondary participants.”
AFSCME Council 962 Political Director Ron Richmond: “We recognize the great majority of our state does not have a pension such as ours. Let me be clear: all working people deserve to retire with dignity. And pensions are the best path to secure that. Government should set the example. A promise has been made to us and needs to be kept. I’m confident that you will find a way to keep that promise.”
Kentucky Association of State Employees Vice President of Member Affairs Julia Johnson: “As state employees, we have paid into our pensions every paycheck and we have kept our part of the contract. It’s up to the legislature to keep your part of the inviolable contract. … The commonwealth will have to pay more because of years of underfunding. We need a dedicated funding stream to provide the funding that is critical.”