Updated with correction.
A Kentucky pension relief bill, which would force quasi-governmental agencies to leave the $2 billion Kentucky Employees Retirement System for Non-Hazardous employees if unable or unwilling to pay rising pension contribution costs, was signed into law Wednesday by Gov. Matt Bevin.
The measure, House Bill 1, passed the Senate in a 27-11 vote also on Wednesday. The Senate voted during a special session called by Mr. Bevin that started July 19.
HB 1 allows 118 quasi-governmental agencies, such local health departments, domestic violence shelters, rape crisis centers, child advocacy centers, and other state-supported universities and community colleges, some of which are struggling to remain open, to leave the KERS Non-Hazardous plan.
Employers that leave the pension plan would direct public employees into a defined contribution option.
While the bill received approved approval from lawmakers in the House and Senate this week, the legislation may still face a battle in court.
Following Wednesday’s Senate vote, Kentucky Government Retirees, an advocacy group representing 15,000 Kentucky Retirement Systems retirees and active employees, said in a statement that it was “bitterly disappointed” in the passage of a bill “that assaults the contract rights of dedicated public employees.”
When guaranteed benefits end next year and the matter is litigated, the group said, “We will expect the Kentucky Retirement Systems board of trustees to fulfill its fiduciary duty to its members by joining in any such litigation.”