Republican Gov. Matt Bevin and GOP legislative leaders have unveiled a summary of their proposed solution for Kentucky’s public pension crisis.
Under the plan, revealed Wednesday morning, and reported by the Lexington Herald-Leader/Kentucky.com, teachers and state and local government employees hired after July 1, 2018, no longer will receive defined-benefits pensions that guarantee them payments throughout their retirements, Bevin said.
Instead of a defined-benefit play, state workers will be enrolled in defined-contribution plans like 401(k) accounts, that they and their employers will contribute to, he said.
"It is generous," said Bevin. 'You will see it. It is a good plan. It will allow people to save a tremendous amount of money for themselves. Some will be theirs. Some will be the state's match but it will be a very good plan."
Most current teachers and government employees will retain their defined-benefits pensions, with the exception of state employees hired after January 2014, who already are enrolled in “cash-balance” plans rather than pensions. Those workers will be rolled into defined-contribution plans next year, Bevin said.
The governor said retirement ages for currently employed teachers and government employees won’t change.
Bevin said he expects to call a special legislative session to approve a pension reform bill soon, but he does not yet have a date to announce.