Lawmakers Could Get Chance To Opt Out Of Pensions
FRANKFORT, Ky. -- Lawmakers could get an opportunity early next year to opt out of the state's pension system. State Rep. David Floyd, R-Bardstown, has drafted a bill for consideration when the Legislature convenes in January that contains the opt-out provision for incumbent lawmakers while ending pensions for all future lawmakers.
The debate over pensions has become more heated in Frankfort because of an ever-increasing shortfall that, by some estimates, could be as much as $30 billion in retirement plans covering lawmakers, teachers, judges, police officers, and other state and local government workers.
Floyd said Kentucky lawmakers work only part time and, therefore, shouldn't be eligible to participate in the state's financially troubled retirement systems.
"I have always believed the idea of part-time legislators receiving pensions is just not right," Floyd said. "That just is beyond the pale. Even if the budget was great and we had a huge surplus of funds, it's still not right."
A legislative task force that has been exploring potential ways to cover Kentucky's public pension shortfall will explore the idea of borrowing enough money through the sale of government bonds to resolve the crisis. The group is expected to review that option in a meeting later this month, though lawmakers appear cautious.
Floyd said he's hopeful lawmakers will give his proposal serious consideration.
"I don't think anyone who participated in the writing of the Constitutioned envision a pension for part-time legislators," he said.
The Pew Center for the States said in a report last week that Kentucky's pension shortfall is more than twice the amount of all revenue generated from state taxes last year.
Lawmakers have been aware of the pension funding crisis for years, and have agreed to only minor modifications that have had little effect on whittling down the shortfall.
"Debates over retirement benefits can easily turn contentious and unproductive," the authors of the Pew report said. "However, it is important to remember that pension problems, such as those in Kentucky, are rooted in simple math rather than in political ideology. Solving these problems requires recognition by all parties that the state must fix them through sound policy."