by Tom Loftus
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FRANKFORT — The Bevin administration illegally withheld from public release an actuarial analysis of the governor’s original “Keeping the Promise” plan to reform Kentucky’s troubled pension system, Franklin Circuit Judge Phillip Shepherd ruled Thursday.
Moreover, Shepherd, who was able to review the withheld analysis in considering his decision, said that it raised concerns that “call into question the effectiveness” of Bevin’s sweeping pension reform plan.
“While the actuarial study of the Governor’s proposal may be embarrassing to the administration in that it reveals substantial fiscal and economic problems with the Governor’s proposal, the Open Records Act requires disclosure,” Shepherd wrote in a 15-page opinion.
At issue is an analysis of the governor’s original pension reform proposal made public in October 2017. Consulting firm Gabriel Roeder Smith & Co. did the analysis at the request of the Kentucky Retirement Systems soon after Bevin released the proposal.
Ellen Suetholz, coordinator of a group called the Kentucky Public Pension Coalition, requested a copy of the analysis though an Open Records Act request filed the following month.
The Bevin administration denied the request, saying the analysis was the type of preliminary record not subject to release under the Open Records Act.
Suetholz appealed that denial to the Kentucky attorney general’s office, which ruled that the requested analysis was an open record that must be released. But the Bevin administration appealed that decision to Franklin Circuit.
Shepherd on Thursday issued a summary judgment affirming the attorney general’s decision and ordered that the requested record be released to Suetholz within 10 days. However, Shepherd’s ruling can be appealed to the Kentucky Court of Appeals.
Suetholz’s attorney, Tricia Herzfeld, of Nashville, said in a statement late Thursday she was pleased with the ruling.
“When the Bevin administration sues its own citizens to prevent the release of public documents, we have to worry about what they are trying to hide and why they would go to such great lengths to hide it. Sunlight is said to be the best of disinfectants,” Herzfeld said.
Steve Pitt, general counsel for the governor’s office, said the administration will appeal the ruling and will seek an order staying any release of the report until the appeals court rules.
“We respectfully disagree with Judge Shepherd,” Pitt said. “The (actuary’s analysis) was clearly a preliminary record.”
Pitt further said he was “extremely surprised” that Shepherd cited some findings of the analysis in his order.
When he released “Keeping the Promise” in October 2017, Bevin said he would call a special legislative session before the end of that year to have lawmakers pass it into law. But the plan was quickly met with opposition from teachers and other public employees who complained about benefit cuts to current employees and other provisions within it.
That plan was never filed as a bill. Instead, lawmakers in the regular 2018 session scaled it back repeatedly to address the concerns, and eventually zipped a pension bill through on one day near the end of the session.
That final bill was struck down in a 7-0 ruling last December by the Kentucky Supreme Court, which said the rapid process used to pass the bill violated a provision in the Kentucky Constitution intended to assure lawmakers and the public have time to read a bill before it becomes law.
Shepherd ruled on Thursday that the actuarial analysis of the original plan was not preliminary and the stamping of the word “draft” on it did not make it so.
He called the analysis “a formal and final report.”
Shepherd wrote, “Once the Executive Branch of government hires a consultant who produces a tax-funded report and it is unveiled to the public with the Governor’s endorsement as the basis for legislative action, the Governor cannot claim the economic analysis of those recommendations is a secret to be hidden from public disclosure and debate.”
Shepherd said his own in-chambers review of the analysis “affirms the importance of public disclosure.”
”The actuarial analysis reveals that, under the proposed plan, the retirement systems will be fully funded by 2047. However, without making any changes to the current retirement systems (as it existed in November 2017), the retirement systems would be 100 percent funded by 2043,” Shepherd wrote.
This and several other concerns raised by the actuary, Shepherd wrote, “call into question the effectiveness of the proposal. In fact, the numbers in this report show that the Governor’s proposal failed to consider significant economic issues over the long term.”
Reporter Tom Loftus can be reached at 502-875-5136 or tloftus@courier-journal.com. Twitter: @TomLoftus_CJ. Support strong local journalism by subscribing today: courier-journal.com/toml.