FRANKFORT, KY (WAVE) - A new fix has now been put forward to solve Kentucky’s $43 billion pension crisis.
Lawmakers have struck out on achieving a solution several times before.
A sewer-turned-pension bill passed in 2018 was ultimately deemed unconstitutional by the Kentucky Supreme Court, and a special session called by Gov. Matt Bevin late last year fell flat.
On the last day to file bills in the House, new legislation aimed at tackling the divisive issue was announced.
House Bill 504 would solely focus on adjustments to the Teachers Retirement System.
Bill sponsor, Rep. Scott Lewis, (R-Hartford), who has served as a school superintendent, said it wouldn’t affect current or retired teachers.
Instead, it places new hires -- starting in 2020 -- in defined benefits plans.
He said that includes supplemental and foundational plans, each respectively described as like 401 retirement saving plans and social security that would not be as dependent on market fluctuations, unlike previously discussed cash hybrid plans.
Lewis said preliminary estimates would save the state $335 million over 20 years.
He said he feels like the bill will have bipartisan and teacher union support because it lets teachers, who don’t get social security, know exactly what to expect when they retire.
“It does several things that the state has been pushing to do,” Lewis said. “It takes care of the sick days added on and the ages going up.”
Rep. Jerry Miller, (R-Louisville), said the Teachers Retirement System is in need of the largest fixes of all the retirement systems in Kentucky.
Miller said others have already seen reform since the state began reacting to pension shortfalls.
Lewis said Bevin was not included in the process of drafting the bill.
The bill was introduced in the House. It has to go through the rest of the legislative process.