Republican Kentucky state Senator Ralph Alvarado says a framework is underway for a new pension bill after Governor Matt Bevin vetoed one earlier this month.
That late session vetoed billwould have allowed regional universities and other agencies to exit the pension system to avoid increased costs. Bevin said it had legal issues and would have hurt the state’s finances.
Alvarado said he wants a general consensus and a “deal done” on a new, actuarially sound bill before a special session is called. He's working to reassure members of the House and Senate that whatever is proposed will be actuarially sound. “We’re looking at trying to make sure that we have something that’s going to make actuarial sense. Something that’s going to be legal, it’s going to take care of those who are already retired. To make sure that they’re not going to have a loss of their retirement benefits.”
He said details are still being worked on, but universities will be pleased with what gets proposed. “The universities are interested in a buyout, effectively. We’re going to protect that. It might be a little bit different of a structure. But ultimately, I’ve talked to some of them and tried to reassure them that what they’ve wanted is effectively going to be in the bill in some form or other."
Universities are interested in bonding, he said, “To be able to create a bond and have a buyout option for them so they can pay an amount into the system and be able to exit that and offer a defined contribution benefit to employees moving forward.”
“There’s been some concerns about letting tier one or tier two employees in or out,” he said. “What are their rates going to look like as far as being able to have the buyout for that?” Those options are being looked at, he said.
Alvarado said the framework also involves protecting the risk for the state, taking care of current retirees and a different structure for new people coming into the system.
A difficult aspect, he said, involves the health centers, rape crisis centers and domestic violence shelters. “We want them to be viable. Some have the options to raise taxes in their communities, some don’t. Some are looking to stay in the system - others looking to exit. Wanting certainty about what their payments will be,” he said.
He noted it will be harder to get a quorum together over the summer as people schedule their vacations or other commitments. “We have a bit of a time crunch, but I’m optimistic we’ll get to a solution for it.”
Bevin is running for reelection this year. Alvarado is his running-mate.
