KY Pension Legislation Heading For House Passage

FRANKFORT, Ky. (AP) - Some Kentucky lawmakers spent the first night of the General Assembly's special session this week at a nearly $3,000 cookout at the governor's mansion.

Kentucky lawmakers heard the second reading Tuesday of legislation aimed at steering the state's financially shaky public employee retirement system away from eventual bankruptcy. Gov. Steve Beshear, who ordered the special session, invited lawmakers to a special cookout following his speech to open the session Monday night.

"The governor wanted to have everyone over to the mansion to express his appreciation for their willingness to work on this important legislation and to celebrate the spirit of bipartisanship and fellowship during this important week," Beshear spokesman Dick Brown said.

Kentucky's state retirement system is facing a more than $26 billion unfunded liability, and lawmakers have said it could collapse financially if left ignored. About 435,000 people are covered by the state retirement system.

Financial problems for the retirement program come as the rest of state government grapples with a projected $900 million revenue shortfall over the next two years beginning July 1. Lawmakers recently passed a two-year $19 billion budget that includes funding cuts for various government programs and agencies.

Shortly after Beshear's speech, about 150 people - including legislators, aides and pension reform advocates - were at the mansion for a dinner that included bratwurst and roast beef sandwiches, Brown said. The menu also included tortilla chips, salsa and bean salsa dip, pasta salad and dessert, he said.

Food and labor for the cookout, combined with a $300 user fee, totaled $2,926.57, Brown said. The governor's office paid for the food and labor, and the state Democratic Party paid for drinks.

Lawmakers are moving ahead with the special session and are on pace to pass the proposed overhaul by Friday. The proposal would, among other things, put the state on a schedule to gradually increase its payments to the retirement system in hopes of eventually paying down the unfunded liability.

Future state employees would have to work longer before being eligible for retirement. To retire with full benefits, the sum of an employee's age and years of employment would have to total 87. It would also require new employees to contribute 1 percent of their salaries to health insurance.

Tuesday marked the pension bill's second legislative reading, and House legislators are looking to pass it on Wednesday.

A bill must be considered on three days in both the House and Senate before it can become law.

House Speaker Jody Richards, D-Bowling Green, said the proposal would help sustain the retirement system for future employees.

"What I think is most important about this bill is that it does make the system sustainable now," Richards said.

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


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