Gov. Bevin, GOP Leaders Unveil Proposed Changes to Pension System

Oct 18, 2017

Republican Gov. Matt Bevin and GOP legislative leaders have unveiled a summary of their proposed solution for Kentucky’s public pension crisis.

Under the plan, revealed Wednesday morning, and reported by the Lexington Herald-Leader/, teachers and state and local government employees hired after July 1, 2018, no longer will receive defined-benefits pensions that guarantee them payments throughout their retirements, Bevin said.   

Kentucky Gov. Matt Bevin said the 401(K) plan proposed for most future public workers will be very generous.
Credit Daniel Desrochers

Instead of a defined-benefit play, state workers will be enrolled in defined-contribution plans like 401(k) accounts, that they and their employers will contribute to, he said.

"It is generous," said Bevin.  'You will see it. It is a good plan. It will allow people to save a tremendous amount of money for themselves.  Some will be theirs.  Some will be the state's match but it will be a very good plan."

Most current teachers and government employees will retain their defined-benefits pensions, with the exception of state employees hired after January 2014, who already are enrolled in “cash-balance” plans rather than pensions. Those workers will be rolled into defined-contribution plans next year, Bevin said.

The governor said retirement ages for currently employed teachers and government employees won’t change.

Bevin said he expects to call a special legislative session to approve a pension reform bill soon, but he does not yet have a date to announce.