News Column

Pension 'supersizing' targeted by Senate bill

January 24, 2014

The Kentucky Senate passed legislation Thursday to deter a controversial pension trick that allows lawmakers to "supersize" benefits with salaries from other government jobs. Senate Bill 4, approved on the Senate floor with unanimous support, takes aim at a retirement law from 2005 known as "reciprocity." The law has generated criticism in recent years when legislators have accepted high-dollar appointments in the judicial and executive branch. Most lawmaker pensions are based on the top three salary years in office. But the changes from 2005 let lawmakers count salaries from other positions in government that often pay far more and can lead to six-figure retirements. Sen. Chris McDaniel , R- Latonia , the bill's sponsor, said it would allow legislators to make a one-time, irrevocable election to forgo any additional pension benefits from other government salaries. "This is a matter of leading from the front," he said. "This is a fundamental matter of trust with voters who send us here to be public servants, who expect us to utilize their tax dollars wisely." Actuaries working with the Kentucky Legislators Retirement Plan estimate that SB 4 would save the state $6.1 million over 20 years if embraced by all eligible members. While not much money in the state's overall fiscal scheme, McDaniel said, "it is a lot in terms of the piece of mind of voters." Similar measures have passed in the Senate five times previously, only to die in the House.


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Source: Legal Monitor Worldwide


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