Gov. Beshear Calls Special Session

FRANKFORT, Ky. (AP) - Gov. Steve Beshear has called the General
Assembly into a special legislative session to deal with pension reform for public employees.
Beshear signed an order Tuesday calling lawmakers back to Frankfort on June 23. The governor previously said he would call
lawmakers back to the Capitol if leaders agreed on a plan to shore up the state's financially unstable pension system.
Beshear said in the order there is an "immediate need to protect the retirement of current employees and modernize the pension system to ensure a financially sound and sustainable retirement program for future employees."
Kentucky's state retirement system covers retirement benefits for more than 445,000 people. The system faces an unfunded liability of more than $26 billion.
Legislative leaders have said that without changes, the system faces an eventual financial collapse.
Among the proposed changes, which would affect only new hires:
State employees would have to wait until the sum of their age and years of employment totals 87 to retire with full benefits. But employees who are 65 or older could retire with full benefits and five years of service. The plan would also require new employees to contribute 1 percent of their salaries to health insurance.
Beshear said in a statement that doing nothing puts the retirement benefits of teachers, firefighters, police officers, emergency workers and other government employees at risk.
"These people have worked hard and earned the right to be financially secure when they retire," he said. "The reforms that the House and Senate leadership and I have agreed to will go a long way toward placing the pension systems on a sound financial footing."
Beshear said the proposed changes could save nearly $500 million
a year.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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