Public pensions are the hot topic of conversation in Kentucky these days. Governor Matt Bevin has pledged to call a special legislative session this fall, most likely in October, to address the challenges facing the state’s public pension systems. Bevin has repeatedly stated his desire to force new public employees into risky and unreliable 401(k)-style plans. He may even seek to change the pension benefits of current public employees in the Bluegrass State. Today we shine the spotlight on the governor’s record on pensions.
Matt Bevin first sought political office in Kentucky by challenging U.S. Senator Mitch McConnell in the Republican primary in 2014. He was defeated by McConnell and then decided to seek the governor’s office in 2015. Bevin was elected governor of Kentucky in November 2015. During the campaign, he discussed the possibility of closing the public pension systems and switching to a 401(k)-style system. At the time, he said “We have to move to a defined contribution plan, period.” He even included this attack on public pensions as part of the platform for his campaign.
After taking office in January 2016, Bevin signed legislation to increase the state’s annual funding of the pension plans. Unfortunately, he then turned away from this responsible fiscal policy. Throughout his tenure as governor, Bevin has been quick to blame past leaders of the Kentucky Retirement System for their mistakes, but rarely discusses the state’s repeated failure to fully fund its obligations to the pension system. He went so far as to forcibly remove the board chairman of KRS in April 2016, which led to legal challenges.
In September 2016, Bevin commissioned a series of reports by the PFM Group, a financial consulting firm based in Philadelphia, to review Kentucky’s public pension systems. In its third and final report, released in late August 2017, PFM unsurprisingly recommended moving newly hired public employees into 401(k)-style plans, an approach that has been tried and failed in other states.
After the 2017 legislative session, Bevin began talking about the need for a special legislative session to address public pensions and tax reform. Initially, Bevin seemed to recognize the need for new sources of revenue to adequately fund Kentucky’s public pensions. Recently, however, he has discussed a special session just for public pensions and dropped the possibility of tax reform.
It’s clear what Bevin’s plan has been all along. He campaigned on closing Kentucky’s public pensions and forcing public employees into inadequate 401(k)-style plans. Despite signing legislation to increase funding to the pension plans, he has never been interested in long-term solutions that would actually shore up and improve the financing of the public pension plans, which do face real challenges in Kentucky. Instead, he has used divisive rhetoric and paid out of state consultants to promote his anti-pension agenda. His rhetoric, especially against teachers, has gotten so egregious in recent weeks that the speaker of the house urged him to tone it down.
In the weeks ahead, as we draw closer to a potential special session, we will be working with our allies at the Kentucky Public Pension Coalition to keep an eye on Governor Bevin and hold him accountable to the truth. Look for the Bevin Truth Tracker to launch as we continue to shine a spotlight on the shady dealings of Kentucky’s governor.