FRANKFORT, Ky. — Some of Kentucky’s retired lawmakers living on public pensions of more than $100,000 a year would lose most of that money if a proposal from Republican Gov. Matt Bevin becomes law.
While some of Kentucky’s public pension systems are almost out of money, the state’s lawmakers benefit from a separate system that is close to fully funded. In 2005, lawmakers changed the law to let themselves combine their time in the state legislature with their salary at other public jobs.
That’s how people like former Democratic state Rep. J.R. Gray could work for 26 years in the House making between $30,000 and $40,000 a year and yet retire with an annual pension of $117,000 a year, based on the salary he made during his three years as secretary of the Labor Cabinet under former Gov. Steve Beshear.
Gray is not the only one to benefit this way: Records show at least six former lawmakers have pensions worth more than $100,000 a year. They include former Republican state Sen. Dan Kelly, who was appointed as a state judge by Beshear: His pension is worth than $104,000 a year.
Bevin’s proposal, endorsed by the legislature’s top two legislative leaders, would re-calculate those pensions so they would be based solely on the lawmakers’ legislative pay, which could result in a big pay cut for some lawmakers.
“We are going to treat ourselves more harshly than any other citizen. We are going to reduce our benefits,” said Republican Senate President Robert Stivers, who is in line for a pension of at least $50,000 a year. “We are not going to have the rich benefits system that we should have never had.”
No other state has tried to retroactively reduce retirement benefits for public workers, including elected officials, according to Keith Brainard, research director for the National Association of State Retirement Administrators. Several states have tried to take away cost-of-living adjustments from retired workers. Those changes are usually challenged in court, and have only been upheld in some states, according to Luke Martel, who directs retirement system research for the National Conference of State Legislatures.
“It is exceptionally uncommon to change the retirement formula used to calculate pensions after a person has retired, and that’s whether the retiree is a state employee, a teacher or a state legislator,” Mantel said.
Since taking office in 2015, Bevin has hired at least six former state lawmakers to high-paying jobs in his administration. But all of them have signed a waiver that says they will not use their salaries to spike their pension benefits, according to a spokeswoman from Bevin’s office.
Former Democratic House Speaker Greg Stumbo called the proposed change “punitive” and said it would not survive a lawsuit. Stumbo spent 30 years in the state legislature before he was defeated in November. He also spent four years as the state’s attorney general. He said his annual pension of more than $66,000 is based on both jobs.
“There’s not a lot of public sympathy for paying governors or legislators. But the fact of the matter is the legislature is a full time job with part time pay. And it’s almost impossible to make a living and participate in the legislature,” Stumbo said.
The proposal could face opposition in the legislature. House Democratic Leader Rocky Adkins said he worried any proposal that retroactively reduces pension benefits would result in costly litigation, but added he would not be impacted by the change.
Legislative pensions in Kentucky were secret until this year when the Republican-controlled legislature passed a law sponsored by GOP Sen. Chris McDaniel to make them public. McDaniel, who opted not to participate in the legislative retirement system, said taking away lucrative legislative pensions would “right a wrong that was done.”
“Had (some retired lawmakers) made their living and decisions in an appropriate way in the first place, they wouldn’t have to have that worry hanging over their head,” McDaniel said. “I don’t feel any sympathy for them.”