Judge Derails Kentucky Governor’s Move to Kill Attorney General’s Pension Lawsuit

Court ruling lets lawsuit go forward to stop teachers’ retirement plan overhaul.

Kentucky Republican Gov. Matt Bevin lost his court bid to quash Democratic Attorney General Andy Beshear’s lawsuit knocking out a teachers’ pension overhaul bill pending before the GOP-controlled legislature.

Judge Phillip Shepard ruled against the governor’s attempt to disqualify Beshear from bringing the lawsuit over the pension bill, which seeks to trim benefits for new teacher hires. The governor’s legal team argued that the attorney general had a conflict because he advised lawmakers on the measure—counseling them to ax it. Beshear then sought a legal remedy when the legislature went the other way. That action constituted an ethical violation, the governor’s side argued.

According to WKYT, Judge Shepherd of Franklin Circuit Court denied the motion because it interfered with the legislative process regarding a pending bill. He also concluded that Beshear had acted “ethically.”

The lawsuit is the latest bout in the ongoing saga of the Democratic Beshear versus the Republican Bevin, with the fate of Kentucky’s pension system on the line.

Beshear had filed the lawsuit after Bevin had tucked the controversial pension reform into a sewage bill overnight, which  Beshear contended was subterfuge. The bill was passed the next day, without a chance for the legislation’s review nor public comment. Beshear claims that the bill violated a legally binding contract with state workers, under the constitution, which he said safeguarded pension obligations.

After the judge’s ruling, Beshear declared that it would ensure that the legislature “never turns a sewage bill into a pension bill ever again.”

The bill would reduce retirement benefits for teachers in order to shore up the state’s floundering pension debt. Under the bill, newly hired teachers would be moved from a defined benefit plan to a hybrid cash-balance plan. Accumulated sick days that can be used toward retirement would also be reduced.

With a funded status of 31%, Kentucky is currently facing a $40 billion shortfall. Bevin has been scrambling over the past year to put together a pension reform that would help save the troubled state retirement system, but all of his attempts have been met with opposition.

Beshear expects the bill to be thrown out in Judge Shepherd’s court. The judge is expected to make a decision on the case by early June.

The governor’s office was unable to be reached for comment.

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