The Richmond Register

January 23, 2014

Bill would let lawmakers ‘opt out’ of pension extra

By Ronnie Ellis
CNHI News Service

FRANKFORT — State Sen. Chris McDaniel, R-Latonia, wants to give his colleagues a “mulligan.”

McDaniel is sponsor of Senate Bill 64, which passed the state Senate Thursday on a unanimous 38-0 vote. The bill would allow lawmakers an opportunity to voluntarily “opt out” of a provision of their pension system that pads benefits.

The measure would undo a controversial provision in a bill passed in the closing hours of the 2005 General Assembly that allows lawmakers to take higher paying jobs but use their tenure in the legislature and its higher multiplying factor to calculate their retirement benefits.

It’s also a provision for which no one has ever claimed credit and is sometimes sarcastically referred to as the “orphan” provision.

Originally House Bill 299, the 2005 bill, was written to allow those who previously worked for the state’s universities or in other state jobs and were subsequently elected to the General Assembly to keep their earned retirement benefits from the previous employment.

But someone at some point in the last-minute negotiations between the House and Senate inserted language allowing all lawmakers to take advantage of the “reciprocity” provision and “super-size” their pensions.

Here’s how it works: a “part-time lawmaker” puts in several years in the legislature, banking time and also benefiting from the higher multiplying factor originally designed to offset lawmakers’ lower “part-time” salaries.

But then the lawmaker resigns or retires and takes a much higher paying job in state government, usually either in the executive or judicial branches.

After a short time, the former lawmaker’s retirement is calculated on his new, much higher salary but multiplied by the higher factor as a legislator and by his years of service including his time in the General Assembly.

It’s become controversial and unpopular with the public. But no lawmaker has ever publicly acknowledged putting the provision in the bill or knowing it was in the bill when it passed.

“I think that’s a vote a lot of people would like to take back,” said Sen. Jimmy Higdon, R-Lebanon, who voted against the 2005 measure while serving in the House. Sen. Joe Bowen, R-Owensboro, was also in the House and voted against it in 2005.

McDaniel said his bill would allow lawmakers to “irrevocably” opt out of the provision and that if all 138 lawmakers did, it would save the state about $6.1 million over 20 years. He said that may not be a lot of money, but it would be significant for taxpayers and voters who “expect us to be good stewards of their tax dollars and to be here to serve them, not to enrich ourselves.”

Sen. Bob Leeper, I-Paducah, voted against the bill in 2005 while in the Senate along with now retired Sen. Vernie McGaha, R-Russell Springs. But even Leeper said he was unaware of the specific benefits for lawmakers in the bill.

“The specifics — no I didn’t know,” Leeper said after Thursday’s vote. “But I caught wind there was something wrong about it.”

Senate President Robert Stivers, R-Manchester, said after the vote that this is the sixth time the Republican controlled Senate has passed such a measure, but the House has never passed it.

“This is the sixth time we’ve given (the House) an opportunity to do something about it,” Stivers said.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.