1992 KERS EMPLOYEE PENSION BLINDSIDED BY KY POLITICS

1992 Legislature's refusal and subsequent concurrent court decision---Jones v. Board of Trustees, 910 S.W. 2d 710 (Ky. 1994)---has reduced KERS funding to only 61% of its total financial needs in 2007. This is 'prima facie' evidence showing the retirement benefits promised KERS members were infringed upon by failure of 1992 Kentucky Legislature to adopt Retirement Boards's actuary's 1992 recommendations. The court decision stated "...the Commonwealth and the benefits provided there in shall...not be subject to reduction or impariment by alteration, amendment, or repeal; i.e., KRS 61.692. Thus, under Kentucky law, pension benefits for public employees and retirees are a contractual right, and those benefits may not be reduced......by the legislature retrospectively."

The 1995 Court decision regarding 1992 Legislature & Administration actions breached KERS inviolate contract [excluding $10 billion underfunded KERS health care] by condoning underfunding of KERS retirement system. Such irresponsible decions has, over time, significantly enhanced potential reduction of KERS retiree's fund if demanded collectively by KERS employees, with fund having on 61% of total funding needed to comply in 2007!
In addition, as a result of the 1995 court decision KERS retiree' funding has been singled out, therefore, discriminated against since other state retirements currently enjoy much healthier financial climates; i.e., Teachers' Retirement System has funds to cover 76 percent of its estimated needs, and County Employees Retirement System has funds to cover 81 percent of
its future needs and National average is 86%.

Legislator and Administration ought to do the right thing which is cut state expenses as recommended by the 1995 Commission On Quality & Efficiency; i.e., $1 billion dollars over next four years while simultaneously bringing Kentucky tax base into the 21st Century making funding more stable, equitable,

Any new administration should implement a detailed plan for addressing the General Fund Deficit such as cutting at least $1 billion of state tax expenses and eliminate, modernize state tax expenditures simultaneouslyincreasing state revenues over 5 years.

Other 2008 recommended action implemented:

Regarding KERS state employees "hired on or after July 1, 2003, who have a contractural right to medical benefits" Legislature and Administration agree to fund KERS retirement account for next two bienumms even with County Employees' 81%

To protect current and future state tax resources and to successfully launch new KERS retirement plan, amend current legislation mandating all KERS employees (including all locally elected state representatives and senators) automatically switched January 1, 2008 to defined contribution retirement plan, accompanied by state guarantee state shall make a future one-time payment to KERS state emploee saving plan ; and,

all KERS non-merit Directors switched to merit system
compensated according to merit pay scale eliminating all non-merit Directors;

eliminate all Policy advisors, special advisors, administrative assistant, executive and executive assistant positions currently being compensated at or above $48,000 annually and grant savings to merit pay KERS employees as one-time raise.

Reorganize all Cabinets into Departments with Commissioners heading
Departments with Salareis maxed at $75,000 annually.

Further reduce state expenses through:

Decrease Medicaid program COSTS by an estimated $850 million by paring down
contracts being paid $100,000+ physicians contracts out of estimated 85,832 personal service contracts .

To raise KERS retirement system from 61% to 81% funding level over next two bieniums amend KERS retirement legislation language placing all new state employees, including newly locally elected state representatives and senators under defined contribution retirement plans effective January 1, 2008; if legislators’ increase in retirement benefits under HB 389, if legislators do not agree to providing 81% level funding to KERS and County retirement systems over next two bienniums

Save estimated $88 million amending current KY statutes eliminating
70 PVA position---as recommended in 1995 by Commision On Quality &
Efficiency task force---and eliminating following state positions; reducing
all non-merit Director positions to merit with comparable merit pay; eliminate following positions---Special assistants/Executive/Reduce Cabinet Secretaries to Department Commissioners capping salaries @$70,000 annually/Policy Advisors

Reducing Office of the Courts

and Legislative Research Commission staffs by 20% (estimated 160 employees from each staff) saving estimated $10 million using
some savings to train remaining personnel to handle more duties and
responsibilities

Amend retirement legislation to eliminate state and county personnel
“retirement loophole”

Generate, enforce clear job duty guidelines addressing any outside
employment---private and/or public

Review and change ways the highway paving contract are bid

Develop Kentucky’s Wood Industry to bring in more tax dollars

Amend legislation to allow substituting one-time payments for across-the-board raises which aren’t added to base salaries for next year’s budget. In addition, the state will not have to contribute up to 7.5% of the bonuses into a retirement account.

Direct Justice and Finance Cabinets to coordingate statewide compliance of titling & registration to locate, identify, assess, bill and collect all
estimated 150,000 motor vehicle tax evading owners owing an estimated $106 million of uncollected usage, property;

Owing estimated $20 million of u-drive-it taxes and state registration fees

eliminate cumbersome and unfairly administered $80 million weight-distance tax on trucks recouping $80 million lost revenues enhancing motor fuels tax and truck registration fees

dash@copper.net