Kentucky Supreme Court Will Weigh Controversial Pension Bill

Gov. Matt Bevin appealed the Circuit Court’s June ruling against his pension reform law.

Kentucky Gov. Matt Bevin has appealed a lower court’s June ruling that nullified his pension reform law, and the state’s highest court has agreed to hear his case on Sept. 20.

Friday, when the governor appealed the Circuit Court’s decision, was the last day he could do so. Bevin’s administration also filed a motion to skip the intermediary Court of Appeals and go right to the top, which the high court agreed to.

Bevin said that Kentucky’s public employee retirement system will collapse without the changes. The bill aimed to turn new teachers’ defined benefits pensions into hybrid 401(k)-style plans. It also raised their retirement ages and limited the number of accrued sick days that could be converted toward retirement.

The pension reforms were initially tucked into a sewage bill in April, during the last days of this year’s legislative session. Lawmakers passed the measure the next day. Shortly after, the law was contested by Attorney General Andy Beshear, who argued that it violated the state constitution, which he said prevented tinkering with their pensions. He also called the legislative strategy the governor used illegal.

Judge Phillip Shepherd, who oversaw the case on the Circuit Court, threw out the law for procedural reasons. He objected that the bill wasn’t read three times on three separate days by policymakers in each chamber. Plus, Shepherd also ruled the law to be an appropriations bill, requiring a majority vote of all 100 members of the House. Five abstentions left a 49-46 tally. That fell short of the necessary 51 yes-vote tally, the judge ruled.

Bevin and his attorney, Steve Pitt, have argued that the law did not violate the state constitution. They have also been very critical of Judge Shepherd, with Bevin on public radio even calling him an “incompetent hack” and a “former Democrat operative.” Bevin is a Republican. The attorney general is a Democrat, and recently announced he will run for governor in 2019.

Shepherd did not rule on whether the law had violated pensioners’ constitutional rights, as he felt the measure’s passing was enough to kill the bill.

“It is essential that Kentucky’s public servants receive a speedy and final resolution regarding the legality of pension reform legislation (SB 151). Without the reforms in SB 151, the system will continue to decline and remain the worst funded in the nation,” Pitt said in a statement, where he declared the ruling be decided by “our state’s highest court and not based on the highly suspect ruling of a single judge.”

“I know we’re right under the law,” Beshear said in a video statement. “I want this matter decided as quickly by the Supreme Court as possible.”

At 31% funded, Kentucky’s pension program is one of the worst-funded in the country. It faces a $40 billion shortfall.

Neither Bevin nor Beshear could be reached for direct comment.

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