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FRANKFORT, KY (WDRB) -- Gov. Steve Beshear shook hands with leaders from both political parties late Tuesday night, congratulating them on passing a pair of bills aimed at shoring up the financially-strapped pension system.
Beshear said the Kentucky Retirement Systems has a collective $18 billion unfunded liability - a financial cofer that would surely dry up without action. Beshear pointed out that's the same amount of money that's required to run for the entire state every two years.
"I'm proud of the bipartisan work that has been done in Frankfort to find a reasonable, practical solution to the pension challenge," said Beshear.
Inaction by lawmakers likely would have led to a special legislative session and key leaders warned that the system would run out of money in the next few years.
This was the time to act, many said.
Senate Bill 2 made fundamental changes to the pension plan by creating a hybrid cash-balance plan for future state workers and local employees hired on or after Jan. 1, 2014. The bill would also make cost-of-living adjustments for employees as long as the funding was available.
Newly appointed or elected lawmakers and judges would also be a part of the new hybrid system, while current state employees and teachers would not be affected by the changes under the bill.
"We treat everybody the same, but let's not get caught up in this little detail, this bill saves the pension system," Sen. Damon Thayer, R - Georgetown, told WDRB News.
House Bill 440 was also passed as a supplemental bill to help fund the pension plan.
But critics of the bills say they are a shell game that rely on Wall Street for funding and will scare away new state workers, state troopers and "classified" school employees like custodians from working in state government.
Rep. Jim Wayne, D - Louisville, was among the most critical, calling it a bad bill, adding that "we should kill it."
"Somehow I feel like I'm standing in a used car lot being told all the assets of the clunker that sits before me," Wayne said, before voting against the measure.
Rep. Derrick Graham, D - Frankfort, represents several state workers who live in his district. He said lawmakers had little less than two hours to read the 200+ page bill. He scolded his leaders for creating it behind closed doors - adding that many state worker unions opposed the measure.
"I guarantee that future legislatures will have to come back to address this same issue," Graham said.
Rep. Mary Lou Marzian, D - Louisville, called the funding mechanism "smoke and mirrors."
The passage of the two measures all but guarantees lawmakers will avoid a special session. House Speaker Greg Stumbo and other key Democrats joined Republican leaders from the Senate in a late news conference Monday night near the governor's office.