Kentucky Supreme Court Strikes Down Pension Bill

Dec 13, 2018

Kentucky teachers and supporters protested a pension law earlier this year at the state capitol building in Frankfort.
Credit Ryland Barton

In a major blow to Gov. Matt Bevin’s administration and the Republican-led legislature, the Supreme Court of Kentucky has upheld a ruling that struck down changes to the state’s pension system that passed into law earlier this year.

The pension law was challenged by Democratic Attorney General Andy Beshear, who argued that the changes violated state workers’ contract rights and that lawmakers had illegally rushed the bill to passage.

Like a lower court that ruled against the law over the summer, the Supreme Court did not weigh in on whether the specific alterations to the pension system were legal, but rather ruled that the manner in which legislators passed the bill violated the state Constitution.

Thousands of teachers and other state workers held massive rallies in Frankfort earlier this year to protest the changes.

After early versions of a pension bill failed amid noisy protests, late in the legislative session lawmakers unveiled a final version and passed it through both legislative chambers in a matter of hours.

The pension law would have changed how current workers can use saved-up sick days to qualify for retirement, and required employees hired between 2003 and 2008 to pay 1 percent of their salaries for retiree health insurance.

Future teachers would no longer receive defined benefit pensions that guarantee benefits from the point of retirement until death, instead receiving “hybrid cash-balance” plans that rely on stock market growth.

Some state workers hired since 2014 would also have the guaranteed rate of return into their hybrid plans reduced from 4 percent to 0 percent.

This story will be updated.