Adkins warns that HB1 is first step in privatizing public pensions
By BERRY CRAIG
AFT Local 1360
"This bill breaks faith with the workers who have always done their part in the pension partnership and will ultimately hurt the stability of the entire pension system," said Senate Minority Leader Morgan McGarvey, D-Louisville.
Today, the GOP-majority Senate approved the Bevin-backed pension bill, sending it to the governor's desk where he quickly and ceremoniously signed it into law.
The governor said bill “is is a remarkably responsible and appropriate next step in moving toward financial solvency.”
Democrats, and some Republicans, decidedly disagree.
The legislation, which the Republican-controlled House passed Monday, allows regional state universities and other quasi-governmental agencies to skip paying higher pension employer contributions for a year. It also incentivizes them to leave the state pension system, worsening the unfunded liability of the pension plan and breaking the inviolable contract of their employees who participate.
The law, which took effect upon Bevin's signature, is retroactive to July 1, when pricier pension bills were sent to the universities and other agencies.
"I'm extremely disappointed in the passage of HB1 and the potentially negative impact it will have on thousands of dedicated public servants across the commonwealth," added Adkins, a Sandy Hook Democrat.
Democrats support the contribution freeze but oppose the part of the bill that permits the universities and affected agencies to pay their estimated pension liability to the state pension plan and opt out of it.
The House approved the bill 52-46. Nine Republicans joined the Democratic opposition. The measure cleared the Senate 27-11 with all the Democrats and a pair of Republicans turning thumbs-down.
"...We are in this difficult position...because the governor's failed leadership has put critical institutions like our regional universities, rape crisis centers and health care clinics in an impossible situation," said a statement from Attorney Gen. Andy Beshear, who is seeking Bevin's job on Nov. 5.
Added the Democratic gubernatorial hopeful: "Without the one year freeze, many of these organizations would have to close their doors. However, none of the options provided under the legislation provide a real path forward and range from potentially illegal to simply impossible."
The statement also said that Beshear is "reaching out to these institutions to insure we can protect them in the short term, while offering them a real fix for the future."
Ron Richmond, a spokesperson for the Kentucky Public Pension Coalition, said HB1 "is irresponsible. Supporters of HB1 have held these quasi-governmental agencies hostage, unnecessarily forcing these employers into a false choice between keeping their doors open and the retirement security of their employees. While freezing their pension contributions was a necessity, taking the extra step to incentivize those agencies to leave KRS does not make sense. With fewer plan participants, the unfunded liability will worsen. At this moment, KPPC’s affiliate organizations are determining next steps.”
Calloway County Retired Teachers Association President Marshall Ward agrees with Adkins that HB1 "is just the beginning for the rest of state pensioners." Ward said Bevin's "goal from the beginning is the elimination of pensions and health care provisions for retirement."Ward, who lives in Murray, added that HB1 "is only the tip of the spear to destroy the inviolable contact and those important benefits to attract and retain competent people to move this commonwealth into the 21st century. If this continues, many people will be compelled to leave Kentucky in retirement or not come here to work in the public sector, community and family ties be damned."