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Courts

Kentucky governor improperly withheld pension reform analysis, judge rules

Kentucky Gov. Matt Bevin

Kentucky Gov. Matt Bevin's administration "wrongfully withheld" an actuarial analysis of his October 2017 pension reform proposal, in the process violating the Kentucky Open Records Act, a Franklin Circuit Court judge ruled Thursday.

After Mr. Bevin announced his "Keeping the Promise" plan in 2017, billed as addressing shortcomings of the state's ailing pension system, the $18 billion Kentucky Retirement Systems, Frankfort, requested that a consulting firm perform an actuarial analysis of his proposed plan, Judge Phillip Shepherd said in his opinion.

But the governor's office declined to disclose the findings on behalf of the state budget director on Nov. 17, 2017, after it was requested through an Open Records Act request by Ellen Suetholz, coordinator of the Kentucky Public Pension Coalition, Mr. Shepherd's opinion said.

Mr. Bevin's pension reform proposal never became law; however, "the public employees of Kentucky have a right to review this information, compare it to the current attempts at reform, and determine for themselves whether they should support such reform efforts," court documents said.

The actuarial analysis revealed that the state's retirement systems would have been fully funded by 2047, under Mr. Bevin's proposed plan. Without making the proposed changes, KRS would have been 100% funded four years earlier.

Additionally, under the proposed legislation, the employer contribution rate would have reached 35% in 2046 before dropping to 4% in the subsequent years, while the pension fund was set, at the time, to have employer contribution rates decrease until reaching 3% in 2043, the opinion said.

The ruling continued: "These examples, which are only a few of the concerns raised by the actuarial report, call into question the effectiveness of the proposal. In fact, the numbers in this report show that the governor's proposal failed to consider significant economic issues over the long term."

"However, while the actuarial study of the Governor's proposal may be embarrassing to the administration in that it reveals substantial fiscal and economic problems with the Governor's proposal, the Open Records Act requires disclosure even if it causes 'embarrassment to public officials or others.' … Simply put, there is no plausible reason consistent with the Open Records Act for the Budget Director to keep this taxpayer-funded economic analysis secret," the ruling said.

Mr. Shepherd ordered that the actuarial report be released to Ms. Suetholz within 10 days.

The ruling comes after Mr. Bevin vetoed a pension relief bill last month that would have allowed state-supported agencies in the $2 billion Kentucky Employees Retirement System for Non-Hazardous employees to leave the system if they were unable to meet rising pension contribution costs.

Mr. Bevin plans to call a special session for lawmakers to reconvene on pension relief before July 1.