A publication of the Kentucky Center for Public Service Journalism

Blake Brickman: Andy Beshear’s lawsuit threatens future of Kentucky teachers’ pensions

Attorney General Andy Beshear is getting plenty of practice for his next campaign as he travels across the Commonwealth to spread fear and misinformation about the new pension reform bill (SB 151), designed to save Kentucky’s public pension system.

Brickman

His most dangerous lies are those of omission. AG Beshear doesn’t want Kentuckians to know about the positive things SB 151 does to help ensure public pensions remain viable. For example:

  • SB 151 stops the practice of underfunding Kentucky Teachers Retirement System (TRS) by requiring future governors and legislators to make the full actuarially required payments to TRS. This is in stark contrast to the old TRS funding formula that allowed former Governor Steve Beshear to fund only 40 percent of TRS’ request. His dereliction allowed Kentucky’s public pensions to become one of the worst funded plans in America.
  • SB 151 establishes a pathway for ensuring that the unfunded liability will be paid off through a new funding formula called “level dollar funding.” Beginning July 1, 2020, this will result in annual contributions of $400 million more than the record $1.2 billion annually that Governor Matt Bevin and the Republicans in the General Assembly placed in the state budget for TRS in the upcoming biennium. One Kentucky union leader admitted this new funding policy “should increase the rate at which the funding level of TRS increases.”
  • SB 151 does not violate the inviolable contract of a single current or retired teacher in Kentucky according to the testimony of the executive director of TRS. AG Beshear has effectively conceded this point in his lawsuit against the bill.
  • SB 151 makes zero changes to retired teachers and changes so minimal to current teachers that AG Beshear has not directly challenged them in his lawsuit. In fact, it has less impact than a similar proposal supported by the Kentucky Education Association and the Kentucky Association of School Superintendents.
  • SB 151 provides a better benefit under the new hybrid cash balance plan for new teachers than the current system. But, don’t take my word for it; the teachers union’s own actuary admitted that “long service teachers may receive stronger benefits from the new CB [cash balance] plan.”

It is unfortunate that these facts seldom appear in Frankfort media coverage and are nowhere to be seen in most social media discussions. But, it is no surprise that you haven’t heard this information from the Attorney General during his political stumping across the state. After all, the facts demonstrate that SB 151 will strengthen our pension system and promote its solvency for future generations.

If the Attorney General’s lawsuit against SB 151 is successful, however, the opposite will be true.  Without reform, every public employee in the state will be harmed, and irreparable damage will be done to countless others through an argument made in the lawsuit, which calls into question many of Kentucky’s most important laws.

The Attorney General’s lawsuit argues that SB 151 should be invalidated because of the process by which the General Assembly passed the bill. If the court rules in favor of this argument, it could invalidate thousands of other bills where the same process was used, including HB 362, which provided relief for Kentucky cities and counties by phasing in CERS pension contributions over a 10-year period. If HB 362 is nullified, it could force cities and counties across our state into financial distress and possibly bankruptcy. AG Beshear’s arguments would also strike down HB 265, which the General Assembly passed this year to allow struggling coal counties to keep more of their coal severance dollars.

Those are just a few examples from the 2018 legislative session. There are decades of laws on the books passed using the same procedure as SB 151. Does AG Beshear really want to open the floodgates and call into question bills like SB 192, which, despite some procedural “problems,” his father signed into law in 2015 to battle the opioid crisis? Does he want to throw the doors of our jails open and release all of those who were arrested because of this law?

While the Attorney General continues to champion a lawsuit that will create more problems and uncertainty for our state, there are a handful of people in Frankfort who truly want to fix the public pension crisis. Since day one, Governor Bevin has passionately fought to fully fund the public pension system and ensure its sustainability. SB 151 is a significant step forward that makes Kentucky’s pension systems more fiscally sound.

Why does Andy Beshear want to stop Kentuckians from being able to take that step? Judging by his behavior, one would think he doesn’t want this problem to get better.

Blake Brickman is Chief of Staff for Kentucky Gov. Matt Bevin

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3 Comments

  1. Marv Dunn says:

    I think the Governor’s mouthpiece is just blowin’ smoke and probably wrote this article at the Governor’s request (or demand). We have already seen state employees running for the door when they see what the new rules have in store for them. I expect schools will have a tough time recruiting teachers in the future. Why would any new graduate or someone early in their career want to teach in Kentucky. Counties on the border may have a particularly tough recruiting job. I think the AG is on to something here and “St Matt, the Devine” can’t afford another loss in the courts.

  2. Jeffrey Hampton says:

    What a liar you are! Arrogant because you and your fat head governor assume that teachers are so ignorant that you know their interests better than they do and this even though teachers are among the most highly educated citizens of this state. Secondly, for these great enhanced benefits that your hybrid plan offers, you neglect to mention that teachers must work more years and in some case several more years to obtain these great benefits. It doesn’t take a genius to see that if you are forced to work several more years, you can actually increase the benefits you receive. You also neglect to mention that with the elimination of the inviolable contract, teacher pension plans are subject to the whims and fancies of future legislatures to raid, underfund and do with as they please. As we have seen, any law, including that which commits to fully fund pension plans, can just as easily be revoked, as was the inviolable contract. Explain to me why anyone would make a contract with this state when it can renege on them any time they so choose.

  3. Roger James says:

    Blake Brickman has rocks in his head. Of course he launches a shabby attack on quality candidate Andy Beshear. Shabby is what rethuglicans do best.

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