Thayer Says Shifting to 401-(K)-Type Pension Plan Critical
A leader of Kentucky’s state senate says a “watered down” version of Gov. Matt Bevin’s pension proposal is being drafted but it would still shift future workers onto 401(k)-type retirement plans.
Senate Majority Floor Leader Damon Thayer said the move is a “cornerstone” of the plan.
“It’s critical that if we’re going to get this state back on a sustainable pension path that all new employees after July 1 go on a 401(k),” he said.
Thayer said he hopes the bill is revealed to the public prior to Christmas so it can be reviewed before lawmakers return for the legislative session that begins on Jan. 2.
“It has many of the changes that were suggested by the public sector. It still makes changes in current pensions that are outside the inviolable contract, ” he said.
Gov. Bevin still says he wants to call a special legislative session for lawmakers to consider changes to the pension systems sometime before the end of the year.
But a majority of Republican House members signed off on a letter discouraging Bevin from calling a special session.
Thayer said the new proposal isn’t finished or scored and there is little time for the legislature to “have a session of any meaningful impact” by the end of the year.
In October, Bevin and leaders of the state House and Senate unveiled a proposal that would phase out Kentucky’s use of a defined benefit pension system for most state workers.
Under the plan, most future and some current state workers would be moved onto 401(k)-type plans in which the state wouldn’t make monthly payments after retirement.
Republican lawmakers have apparently backed off some provisions affecting current retirees and employees—including the 3 percent fee for retiree health and suspension of cost of living adjustments.