On the Senate floor Monday, Senate President Robert Stivers spoke on the pension system and the idea of bonding in order to give an influx of cash into the Kentucky Teachers Retirement System. Stivers stated he had spoken with House Speaker Greg Stumbo about House Bill 4 and his desire to see systematic changes to the pension system before the bonds can be issued.
Stivers noted the Kentucky Teachers Retirement System board has delivered a list of changes they believe should be made to their system to ensure its stability. Making those changes and possibly a few others are needed before moving forward, according to Stivers.
The Kentucky Chamber has expressed concerns about moving forward with such a decision without public debate on the idea as well as a deeper look into the system’s practices.
In March 2014, the Kentucky Chamber called for the creation of an interim legislative study group to conduct a thorough review of KTRS funding issues, using independent outside experts, and recommend reasonable strategies to address the funding gap and unfunded liabilities. The Chamber commends the Senate for addressing this issue with similar language for the 2015 interim.
In his floor speech, Stivers called Speaker Stumbo’s proposed $3.3 billion bonds for teacher pension fund just “a temporary money fix.”
The Senate State and Local Government heard House Bill 4 upon recess of the Senate where President Stivers formally offered his committee substitute to the bill, which would strip the original language of the House bill, bonding $3.3 billion, and replace it with an interim study. He further explained that KTRS has given the legislature nine points that needs to be addressed when looking at systematic changes. The Senate President said he feels confident that these nine points are a good starting point and is hopeful that an agreement can be reached before the next General Assembly.
House Bill 4, as amended by the Senate Committee Substitute passed the Committee along party lines.
Also heard in the Senate State and Local Government Committee was Chamber-supported HB 306, which would require an actuarial analysis of KRS which would include the impact on funding levels and unfunded liabilities over time, require funding mechanisms be disclosed and require an actuarial study of the system be performed every five years. Sponsor Rep. Brent Yonts presented the bill and stated that this bill is a legislative recommendation of the Public Pension Oversight Board, co-chaired by Sen. Bowen. HB 306 passed unanimously out of the committee, but was not placed on the consent calendar.
The full Senate passed another Public Pension Oversight Committee recommended bill, House Bill 47, which would add the Legislators’ Retirement Plan, the Judicial Retirement Plan and the Kentucky Teachers’ Retirement System to the Public Pension Oversight Board’s review responsibilities. The Chamber agrees that every public pension system needs additional oversight. HB 47 passed the Senate unanimously and now heads to the House for concurrence.