Kentucky pension crisis: Bevin, top legislators reject reversing cost of living adjustments

FRANKFORT, Ky. — The controversial recommendation of the state's pension consultant – to roll back benefits of current retirees enhanced over the years by cost of living adjustments – appears to be dead.

"Nobody, neither myself nor anyone in the legislature, thinks that we should be clawing back pay adjustments – COLAs as they are called – from retirees. It makes no sense," Gov. Matt Bevin said in an interview on WHAS Radio's Leland Conway program Wednesday morning.

House Speaker Jeff Hoover, a Jamestown Republican told reporters in Frankfort later Wednesday of the recommendation, "It’s highly unlikely that that’s going to take place."

And Senate President Robert Stivers, a Manchester Republican who spoke to reporters at an impromptu news conference with Hoover, said, "That's a recommendation of PFM. And they do not have a seat" in the Kentucky General Assembly.

Stivers was referring to last week's report of PFM Group of Philadelphia, which included many recommendations for the legislature to consider in bringing Kentucky's public pension debt of about $40 billion under control.

More on our pension crisis

►Top legislators frown on reversing cost of living adjustments
►Benefit counselors are swamped but online help is available
►Retirements up last month, and so are questions about retirement

Perhaps the most controversial recommendation called for reducing future pension benefit checks of current retirees by rolling back cost of living adjustments they received between 1996 and 2012 – a move the consultant acknowledged could reduce benefit checks of some retirees by 25 percent or more.

In the radio interview, Bevin said of the recommendation, "I would dare to say that's pretty much a non-starter. ... Nobody in the House or the Senate or myself is a proponent of doing that."

Neither the governor nor the two top legislative leaders discussed other recommendations by PFM in their public comments during the day.

Hoover, for instance, declined to say whether the reform plan ultimately considered by lawmakers would preserve all retirement benefits now enjoyed by current state workers and retirees, stressing that the plan is still being developed.

Bevin has not set the date for a special legislative session, but some key lawmakers including Hoover said it will take at least seven or eight weeks before a session should begin. Hoover has said the framework of a final plan must be agreed upon by leaders, then staff given time to draft that into bill form, then lawmakers given time to study the legislation.

Questions and answers

►Kentucky Pension Crisis: How many plans does the state have?
►Kentucky Pension Crisis: How big is the pension problem?
►Kentucky Pension Crisis: How many people are in these systems?

Also Wednesday, the governor and the legislative leaders showed no support for the suggestion that casino gambling be legalized as a source of new revenue to help address the pension crisis.

Hoover and Stivers said they have not heard the gambling idea being discussed by lawmakers. Conway pressed Bevin during the radio interview on ideas for raising revenue without higher taxes, such as expanded gambling which many states have approved or legalization of marijuana as the state of colorado has done.

But Bevin said he does not believe the benefits of legalizing expanded gambling would offset "the societal costs."

And the governor said of following Colorado's lead on marijuana, "It is not going to happen while I'm governor."

Tom Loftus can be contacted at tloftus@courier-journal.com or 502-875-5136.