Kentucky Gov. Calls Special Legislative Session to Address Pension Crisis

State house introduces two pension reform bills during late-night meeting.

Kentucky Gov. Matt Bevin called for a special legislative session of the General Assembly Monday night to address the state’s public pension crisis less than week after the commonwealth’s Supreme Court struck down a pension reform law as unconstitutional.

“I am convening the General Assembly into special session to enact vital legislation that will be a meaningful first step toward shoring up our dying pension system,” Bevin said in a statement. “We stand at the threshold of financial failure. That is not acceptable.”

According to an official proclamation issued by Bevin, Kentucky’s public pension systems are the “worst funded in the nation” with an unfunded liability as high as $84 billion.

“Kentucky’s pension crisis represents the single greatest threat to the long-term financial health of the Commonwealth,” said Bevin. “Last week’s decision by the Supreme Court to strike down SB 151, based solely on process, and with utter disregard for legal precedent and the separation of powers, has only served to create further uncertainty, fear, and the likelihood of financial insolvency.”

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The Supreme Court had upheld a circuit court ruling that the legislature violated the state’s Constitution because it did not give lawmakers a “fair opportunity” to consider the bill before it was signed into law by Bevin in April.

As a result of the special session, two pension reform bills—House Bill 1 and House Bill 2—were introduced late Monday night by State Rep. Jerry Miller (R-Louisville). House Bill 1 is similar to the bill that was stuck down, with the exception that it does away with a requirement that the legislature switch to a funding method known as “level-dollar funding” that requires larger pension payments in the next few years.

House Bill 2 provides that the 3% benefit factor for years of service in excess of 30 in the Kentucky Teachers’ Retirement System only applies to years of service earned prior to July 1, 2024. It would also provide that the County Employees Retirement System (CERS) employer contribution rates not increase by more than 12% per year over the prior fiscal year from July 1, 2018, to June 30, 2028.

In a Facebook video post, Kentucky Education Association President Stephanie Winkler said Bevin was being “irresponsible” and “disingenuous” for opening a special session just 22 days before the regular session begins.

“This is nothing but a reactionary public temper tantrum from the commonwealth’s highest elected official,” said Winkler, “and our state’s financial future will never improve if we keep wasting taxpayer dollars on governing around the people instead of with them.”

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