Because of the statewide teacher shortage, school districts can go from hiring just 1% of retired teachers to 10%.
Bevin reacted to the state's Supreme Court ruling that found Centerstone Services, which used to be Seven Counties, cannot leave the pension system through bankruptcy.
The Kentucky Senate State and Local Government Committee easily approved the bill on a straight party line vote.
The House adjourned after one hour. Lawmakers are expected to return at noon on Saturday.
Bevin said many state employees could lose their jobs if the legislation isn't passed by July 1.
House Bill 358 freezes employer contributions at the current level for one year, but tough choices will have to be made about whether to stay in the system.
Talks of a state takeover date back at least a year following an audit that uncovered unsafe conditions for workers and juvenile inmates.
The protest canceled classes for Jefferson County Public Schools.
Last week, Fischer, a Democrat, warned last week that Metro government may need to lay off public workers, stop services and make other moves to handle state-ordered increases in public pension costs.
Bevin said "the time for talk is over. It's now a time for action."