Kentucky GOP drafts pension changes

FRANKFORT, Ky. — Most of Kentucky’s future public employees would not get guaranteed pension payments under a deal announced Wednesday by the state’s Republican leaders, who are trying to salvage one of the worstfunded public retirement systems in a country where many such plans are awash in red ink.

The plan to move most new hires into a 401(k)-style system would still put pressure on state taxpayers, who would be legally required to make annual payments of more than $2 billion to the system. That’s roughly 20 percent of the state’s annual general fund spending.

“This is a big, big cost to the people of Kentucky,” Republican Gov. Matt Bevin said, but added it will keep the plans solvent. “If you are working toward retirement and hoping to be a retiree at some point, you should be rejoicing at this bill.”

The proposal unveiled by Bevin and the state’s top two legislative leaders still must pass the Legislature, most likely during a special session that Bevin plans to call before the end of the year. Democrats, who have a minority in both chambers, appeared opposed to the plan.

The plan spares the state’s more than 166,000 current retirees from any reductions in their pension checks.

Most new hires, plus anyone hired after Jan. 1, 2014, would move into the 401(k)-style plan, with the exception of police officers and firefighters.