FRANKFORT — Senate President David Williams and House Speaker Greg Stumbo say the state employee pension system, which has taken a hit from the stock market, may need to be revamped for future employees.
With only two working days left after Friday, it’s too late for this session to take up the issue. But both legislative leaders said the General Assembly is likely to take up the issue over the next year.
Their comments came during their weekly Friday news conference in the Capitol.
Williams, R-Burkesville, said the Beshear administration and the legislature need “to come to grips with the fact that we have a pension plan that we cannot allow people to continue to enter with the level of benefits that they have now.”
“It is out of touch with what is happening with the private sector. It is a pension plan that cannot be sustained as far as new employees.”
“Until we come to grips with that problem and make the pension plan we have more like what’s available out in the private sector, then we are going to continue to have this problem and it’s going to get worse.”
Asked if he will push for reductions in benefits for new state hires, Williams said, “For new employees, we need to have a different pension plan.”
Williams stressed that he was referring to new hires and not current workers and retirees.
Stumbo, D-Prestonsburg, said the legislature will have to review the pension plan for new hires because of the troubled economy.
He said “the solution that we thought was corrected” in a legislative session last year is likely to be revisited.
“We need to think about long-term strategies,” Stumbo said. “It’s going to take a rethinking of the funding mechanism.”
Lawmakers last year approved a plan to fully fund the state’s retirement systems in 20 years. It currently has about a $30 billion shortfall.
Also at Friday’s news conference, Williams said he agreed with Stumbo, a former attorney general, who has said the state constitution wouldn’t have to be changed to allow the state Lottery Board to oversee video lottery terminals, which Williams said are essentially video versions of lottery pull tabs.
Stumbo has proposed a bill that would allow slot machines at horse race tracks. It came up for a hearing Thursday in a House committee but wasn’t voted upon. Stumbo has said it could be in the mix for potential revenue-raising measures in the future.
But Williams said Friday no measure to expand gambling is likely to pass the Senate. He said some senators would only vote for a proposal allowing slots at the racetracks or casino gambling if it were in the form of a constitutional amendment because they want Kentuckians to have the chance to vote it up or down in an election, as the process to change the constitution requires.
And that would even be unlikely to get the necessary 23 votes in the Senate, Williams added.
– Jack Brammer and Ryan Alessi