The General Assembly has passed the retirement bill. The bill was loaded with weasel words that allow the legislature to back out of any commitment.
Sen. Tom Buford, R-Nicholasville, was the lone lawmaker to oppose the bill. He warned that the legislation is a mediocre first step that doesn't do enough to keep the retirement system from draining the state government's coffers in the future.
”If our goal is to achieve mediocrity in the pension plan, we have succeeded,“ Buford said.
The net result of the bill was to screw the workers and retirees a little bit while the Legislature doesn’t bite the bullet and do the right thing.
There are three approaches to this problem.
One the approach the legislature took. Reduce benefits to workers and retirees, but not enough that they actually scream. Promise to do better in the future and claim victory.
”Regardless of the speeches about this being an important first step, this is the ball game,“ he (Jody Richards) said. ”This puts us on a sound foundation for several years.“
Richards, once again, exhibits an inability to do math. If a worker is hired this year, after this bill goes into effect, and given the changes just made, the system will still not be on sound financial footing when the worker retires.
A second approach would be the David William's totally shaft the worker proposal.
One of the more controversial proposals not addressed by the legislation is a plan (Senate President David) Williams has backed that would create a so-called defined contribution option, similar to 401(k) plans that let workers manage their own retirement investment accounts.
Here is the bottom line on 401(k) investments from the Kentucky Deferred Compensation Authority, the existing state 401(k) agency.
Investing may involve market risk including the potential loss of principal.
In other words, with Williams plan you have a chance of reaching retirement age and not have a retirement fund.
The third approach would be for the General Assembly to pass comprehensive tax reform and generate enough revenue to meet the obligations to state employees.
But the odds of the General Assembly summoning up the collective backbone to do such a thing is doubtful. These folks couldn’t pass a cigarette tax increase when it was not only the right thing to do but was supported by most of the voters.