CAPE GIRARDEAU, Mo. (KFVS) - Governor Matt Bevin signed an executive order prohibiting pension spiking.
Pension spiking is when former legislators appointed to executive or judicial branch positions can potentially double or triple their pension payout.
According to the governor’s office, members of the Kentucky General Assembly who started participating in the legislator’s retirement plan before January 1, 2014, are entitled to a defined benefit pension. The final pension payout for this plans is calculated using a formula based on the individual’s years of service in the legislature, multiplied by the average salary for the three highest years of salary and then multiplied by a percentage called a benefit factor.
In 2004, the General Assembly passed House Bill 299, known as “the Greed Bill,” which allows part-time citizen legislators to spike their legislative pension using their highest three years of salary, even if that salary was earned in another government position.
The passage of Senate Bill 3 in 2017 required that pensions of all current and former legislators be subject to open records requests for the first time. As a result, the public learned that many former legislators earned pensions in excess of $100,000 per year because of pension spiking.
Senate Bill 151, passed by the General Assembly in 2018, ended pension spiking, but it didn’t become law because the Kentucky Supreme Court struck it down based on procedural issues.
Currently, according to Governor Bevin, the legislators’ retirement plan is funded at nearly 100 percent, while the Kentucky Employees Retirement Plan is only 14 percent funded.