Higdon proposes repeal of costly legislative retirement perk

State Sen. Jimmy Higdon, R-Lebanon

By Jack Brammer and Beth Musgrave - jbrammer@herald-leader.com

FRANKFORT — A newly elected Republican state Senator wants to cancel a costly, four-year-old benefit in the retirement system for state lawmakers that has been wielded recently by Gov. Steve Beshear as a political weapon.

Sen. Jimmy Higdon, R-Lebanon, filed legislation last week that would cancel a 2005 provision that allows annual retirement benefits to increase dramatically for former lawmakers who switch to a judicial or executive branch job.

Higdon said no one is elected to the legislature with the expectation of receiving a plum retirement. The private sector is cutting back on such perks and so should the legislature, he said.

“It’s a benefit that we clearly can no longer afford,” Higdon said.

The two legislative committee chairmen who oversee state government issues also said last week that they support changing the benefit during the 2010 General Assembly that begins Jan. 5.

Lawmakers first approved the provision, which can increase six-fold the annual retirement benefits of affected lawmakers, during the waning hours of their 2005 law-making session.

It specifically altered the legislative pension program so that lawmakers who become judges or take a position in the executive branch will get a pension benefit based on their highest three years of salaries in state government — not just as a lawmaker.

At the time, Donna Early, executive director of the system that manages both the judicial and legislative pension programs, could not say how much the provision would cost the state. But she accurately predicted that the cost would increase over time.

A recently released actuarial report for the Kentucky Legislators Retirement Plan said the cost of providing pensions for state legislators will jump from $759,158 in the current budget to $4.28 million over the next two years.

Almost half of the $4.28 million will be used to pay for the 2005 provision. That spike is due in part to so many legislators over the past two years opting to take jobs in the executive and judicial branch.

The issue has gotten more attention this year because Beshear, a Democrat, appointed two Republican senators to jobs with high salaries that will dramatically increase their pensions.

Beshear was hoping to chip away at Republican control of the Senate. He was successful in one race but not the other.

Consequently, the legislative pension of Sen. Charlie Borders, R-Russell, will jump by at least $37,500 a year if he works at least three years in his $117,000-a-year appointment to the Public Service Commission.

The pension of former Senate Majority Leader Dan Kelly, R-Springfield, who was appointed to a circuit judgeship, will also increase dramatically. Kelly will make $124,620 a year as a circuit court judge. As a legislator, he made about $50,000.

In a special election in early December to replace Kelly, the issue of the retirement perk became a campaign issue.

Higdon, a former state representative, won the race to replace Kelly. Higdon said he campaigned on the promise to file a bill that repealed the provision.

Higdon’s bill eliminates the enhanced benefit for anyone elected to the legislature after November 2010, but Higdon said he plans to amend the bill to scrub the entire program.

Meanwhile, Senate State and Local Government Chairman Damon Thayer, R-Georgetown, said he, too, is working on a bill that “generally speaking would close the loophole that allowed the governor to attempt to subvert the usual electoral process and take over the state Senate.”

He said the current provision is “very costly” and “we should make a serious attempt to close the gap.”
In the Democratic-led House, State Government Committee Chairman Mike Cherry, D-Princeton, said the pension benefit will receive scrutiny.

Cherry voted against the original provision in 2005.

“I think there is a good chance of some action repealing some of that legislation,” Cherry said. “I would want to see what Sen. Higdon’s legislation says first. But I am discussing this issue with leadership and other members of my caucus.”