The state Public Pension Oversight Board is offering few specifics in its year-end recommendations to the General Assembly ahead of the body's 60-day regular session. A leading member says divisions that helped derail an anticipated special session on pensions also prevented the board from endorsing more concrete reforms.
With disagreements over pension reform strategies yet to be ironed out and a still-brewing sexual harassment scandal in the House GOP caucus, the oversight board quietly passed the baton to the legislature Monday – reaffirming some previous guidance that failed to materialize during the 2017 session.
Addressing the lack of specifics, board co-chair Sen. Joe Bowen pointed to philosophical differences over how to properly fund state retirement systems and lock in a sustainable system moving forward.
"Those philosophical differences find representation among the members of the Public Pension Oversight Board, thus the difficulty of making detailed pension legislation recommendations on the cusp of what is anticipated to be a 2018 regular session which will consider major pension reform proposals," the Owensboro Republican said.
Outcry from public employee and teacher groups over proposals in Gov. Matt Bevin's initial reform package appears to have given some House Republicans pause as they consider changes for future state workers, most of whom would land in 401(k)-style plans under the governor's plan.
Among the recommendations okayed by the board Monday: reviving a teachers retirement system housekeeping bill, eliminating lawmakers’ ability to "spike" pensions using salaries earned from other public employment, and instructing the General Assembly to evaluate a pension system audit by consultants with the PFM Group.
That report featured a number of highly controversial recommendations, including rolling back retirees’ cost of living adjustments.
Board members also heard an update on the state's mounting pension debts. Estimates vary drastically depending on the investment return assumptions employed, but the latest numbers provided to the board suggest total unfunded liabilities have swollen from $26.5 billion in 2007 to $43.8 billion in 2017.