July 28th, 2021
Herald-Leader | Group highlights six-figure government pensions, calls for more transparency
Dozens of Kentucky state and Lexington city employees can look forward to six-figure government pensions every year once they retire, in some cases before their 50th birthdays, according to estimates released Monday by an anti-tax group.
However, taxpayers don’t know for certain who gets what because Kentucky law requires that public pension records be kept confidential. The Chicago-based Taxpayers United of America delivered a letter to Gov. Steve Beshear’s office on Monday calling for a repeal of that law, to make public pensions as open to outside scrutiny as public salaries.
“People hear about these huge unfunded pension liabilities, and it’s so big, it doesn’t really mean anything to them. But if you can go to them and say, ‘Here’s the size pension that your child’s fourth-grade teacher will be getting, here’s what the elementary school principal will be getting,’ it’s something they can relate to,” said Rae Ann McNeilly, the group’s director of outreach.
The group is lobbying nationally for an end to guaranteed lifetime pensions for government employees. Instead, the group said public workers should be enrolled in private savings plans, like a 401(k), they should pay a greater share of their retirement costs and they should work until later in life, as private sector employees do.
To get the estimates it released Monday, the group used publicly available government salaries and applied the formulas of several public pension funds. It ended up with educated guesses.
Gov. Steve Beshear, for example, will get an estimated $96,191 a year in retirement, less than some of his top aides and political appointees, the group said. Beshear’s office did not dispute the group’s estimate of his pension.
“In the past year, we have traveled to many states to research and publicize public employee pensions. We have often found that government pensions are higher than private sector salaries,” the group’s vice president, Christina Tobin, wrote to Beshear. “Sadly, one of the least cooperative states has been Kentucky.”
Government pensions have been controversial in Kentucky in recent years. The state’s public pension funds face a collective unfunded liability of close to $30 billion, among the nation’s worst. The state and local governments expect to plow hundreds of millions of additional dollars into those pension funds in coming years, diverting money from other services to honor the pledge of lifetime benefits.
In the legislature, Senate Republicans have pushed for private retirement plans for future state workers, arguing that the present model cannot be sustained. House Democrats have blocked that measure.
A spokeswoman for Beshear on Monday did not address the issue of public pension confidentiality. But the chairmen of the legislative committees on state government said they’re open to change.
“I’ve been an advocate for more transparency and accountability in all aspects of government, including our pensions, and I think this group has a good point,” said state Sen. Damon Thayer, R-Georgetown. “You would see greater demand for pension reform if people had more information about the amount of money that public employees are collecting in their retirements.”
Rep. Mike Cherry, D-Princeton, said he needs more information before committing, but added, “It’s worth considering. Most everything we do now is supposed to be transparent, and I don’t have any problem with that.”
According to the anti-tax group’s estimates, Kentucky’s largest public pensions — 46 of them at $200,000 a year or higher — will go to doctors, scientists, sports coaches and administrators at the state universities.
Away from the college campuses, 18 state employees (mostly political appointees at the Cabinet for Economic Development, Health and Family Services Cabinet and the Justice Cabinet) and 10 city employees (all of them police officers and firefighters at the rank of lieutenant or higher) will get annual pensions of more than $100,000, the group said.
Statewide, two dozen school teachers will get more than $60,000 a year, including six in Fayette County, the group said.By contrast, Kentucky’s average wage for a worker is $38,000 a year, and outside of government jobs, few people can expect to get pensions anymore, the group said.