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Metro Newsroom

Councilman Miller to Lobby for State Pension Reform

Tuesday August 21, 2012

Louisville Metro Council
Media Advisory
FOR IMMEDIATE RELEASE                                  
STEPHEN HAAG, JR.   574-1204 / 645-1752

Louisville, KY; Metro Councilman Jerry T. Miller will be in Frankfort today to lobby members of the General Assembly’s Task Force on Kentucky Public Pensions. Prior to today’s 1 p.m. meeting, in Capital Annex Room 149, Councilman Miller will lobby for real reforms in public pension policies that will fix our long-term unsustainable debt.

Understanding that the problem of underfunded pensions, which has been building over decades will take time to fix, Councilman Jerry Miller has put together seven steps that can be taken now, to start the process of fully funding our current pension obligations while moving public benefits more in line with those outside of government.

“Each Kentuckian’s share of the unfunded debt is over $8,000.  That is $8,000 for each adult, teenager, child and even infant. That amount isn’t going away and despite efforts in Louisville Metro to eliminate nearly 1,500 persons and positions, our share in this liability continues to grow. While I fully support a more efficient and effective government – some of these cuts have been detrimental to the upkeep of our roads, parks, zoo and other public spaces. And there will be more cuts in the future as this debt becomes a larger and larger drain on government budgets. That is why I am doing everything I can to make people aware of this problem, give them my ideas for solving this problem and most importantly calling on those in Frankfort to address this problem before it is too late.” – Councilman Jerry T. Miller (R-19)

Councilman Miller will be handing out a one page flyer titled, “What Needs to be Done NOW!” to persons at the meeting and will be lobbying members of the Task Force to consider these and other suggestions that will start the process of fixing our public pension system. A copy of the flyer has been inserted below. For more information on Councilman Miller’s efforts please contact, Stephen Haag at (502) 645-1752.

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What Needs to be Done NOW!
Louisville Metro Councilman Jerry T. Miller

The goal of all changes should be to move the retirement system for public employees closer to the plans of taxpayers working in the private sector. That must include their healthcare benefits.

The steps below allow us to keep our promises to most current and retired employees without hundreds of millions in new taxes.  Otherwise, the un-competitiveness of Louisville and Kentucky will keep us from attracting the new businesses that will employ our children and grandchildren.

1. Amend KRS 61.661 Member’s Account Confidentiality exempting persons from the provisions of Kentucky’s Open Records Law KRS 171.410-171.740. Any participant of a KRS or KTRS retirement plan who has ever held elective office should not enjoy this exemption.  Any beneficiary whose benefits from all KRS and KTRS  plans total more than twice Kentucky’s Per Capita Income (2 x $33,348 = $66,696) shall not enjoy this exemption from Transparency.

2. Suspend cost-of-living pension adjustments for beneficiaries until their respective pension system is 80% funded.  This is a less painful way to effectively decrease costs at a gradual rate, which doesn’t have a significant immediate impact on beneficiaries.

3. Place all new non-hazardous duty employees, including Judges and Elected Officials, into a defined contribution retirement plan.   Their voluntary defined contribution would be up to 6% of salary for which their government employer would contribute twice the percentage contributed by the employee.

4. For all current participants in non-hazardous retirement plans, increase their share of the pension cost.  (In 1985, Louisville paid 5.25% of salary, while the employee put in 4%, which equates to 43% of their pension cost.  Today, an employee hired prior to 2012 pays only 20% of the cost of their pension.) Over a period of years, the contribution percentage for a non-hazardous employee must be increased until it equals at least 33 1/3% of the cost.  (e.g. if Metro contributes 20%, the employee’s share would be 10% of payroll.)  This should not violate the theoretical “inviolable” contract.

5. Incent current employees with “inviolable” contracts to voluntarily switch to a “hybrid” plan, which is a defined contribution retirement plan backed up by a lower-level defined benefit plan – somewhat like an annuity.

6. Reduce health care insurance costs by using consumer-directed plans.  We cannot continue to allow public employee retirees to have better health care benefits than the taxpayers.

7. For new employees who choose to retire prior to Medicare eligibility, or who have dependents not covered by insurance or Medicare, allow such individuals to remain in their pre-retirement health plans, provided they pay the full premium – similar to COBRA coverage.  This will give them the benefit of continued insurability and lower group rates.

Jerry Miller (R) 19