The following is a copy of an email sent to me by a friend in Frankfort. My friend received the email from former Governor and Senator Julian Carroll.
Carroll has always been on top of money issues in Frankfort and his analysis of the retirement bill is pretty dead on.
I recently reported to you the negotiated House and Senate Leadership Pension Bill, together with charts showing the details of the agreed plan. Governor Beshear had previously charged the Leadership with negotiating such an agreed plan as a condition for calling the Legislature into a Special five-day Session in order to enact into law the proposed plan.
Just as a matter of explanation to some who are not familiar with the process, House Bill 1, the pension bill, was introduced Monday, June 23 on the first day of the Special Session and immediately referred to a House Committee for action. The Committee considered the Bill and reported it back to the House for a first reading.
The Bill received its second reading today and House Bill 1 will be considered for a vote on Wednesday, June 25, on that same day, the bill will be received in the Senate, referred to a Senate Committee, and reported out of Committee to have its first reading as required by the Constitution. The Senate will give the Bill its second reading on Thursday, and call the Bill for final passage on Friday. The Bill will then be enrolled and sent to the Governor, and the Session will adjourn Friday.
The Bill contains an Emergency Clause, which provides for it to become effective on enrollment and signing by the Governor. House Bill 1 will become law upon the signature of the Governor, presumably on Friday June 27, 2008.
I have received numerous questions about the pension bill. I hope that the bullets below will help clarify any questions that you may have.
For existing employees, beginning July 1, current and future KERS, CERS and SPRS retirees will receive a set 1.5 percent Cost Of Living Adjustment (COLA).
For current employees, hazardous KERS, CERS and SPRS retirees, who return to work on or after September 1, 2008 in SPRS in a hazardous duty position in KERS or CERS, will be required to observe a one-month break in employment.
All other KERS, CERS and SPRS retirees who return to work on or after September 1, 2008 in KERS, CERS or SPRS, will be required to observe a three-month break in employment.
Provided the break is observed, the employee can return to work, draw his pension, but will not contribute to the systems or earn a second pension. However in order to further fund the system, the employer will be required to pay contributions to the systems and the health insurance premium of the retiree not to exceed the cost of a single premium.
The Bill will presumably become law on Friday, June 27, 2008 , so the provisions for new hire's after September 1, 2008 as previously reported, will be in affect.
The argument, which has been made for increasing the break in reemployment to three-months is the savings that will be realized both for balancing the new budget starting July 1 and funding the unfunded balance for the retirement system.
I hope this information, along with what I have previously sent, will answer most of your questions.
Please feel free to contact me if I can be of assistance to you.
Julian M. Carroll