Kentucky

Findings from TUA’s pension project on Louisville, Kentucky, are featured in this article at the Courier-Journal.
Members of Taxpayers United of America, a national taxpayer watchdog group, made several stops in Kentucky Tuesday to spread their belief that the amount of pension payouts to individual government workers should be available for public scrutiny and that reform is needed to keep the system from going broke.
Christina Tobin, vice president of the organization that was founded by her father, one-time Illinois libertarian gubernatorial candidate Jim Tobin, said the public has a right to know pension costs just as government salaries are considered a public record.
Tobin also distributed a list of estimated pensions for some of Louisville metro government’s top officials, and a list of estimated state pension payouts.
The lists make a number of assumptions, such as each employee will retire after 30 years of service at age 52, have a cost of living increase of 2 percent per year, and that their current salaries are an average over several years.
Those assumptions make individual predictions invalid in most cases, but the list does show that some metro government employees can qualify for pensions as high as $168,000 a year under those conditions. State pensions on the list reach as high as $256,000 annually.
Tobin said that compares with an average annual wage of $45,000 in Kentucky.
“We are sensing taxpayers are not happy and they don’t think it’s fair,” Tobin said of the large pension payouts. “There needs to be transparency and reform.”
Specifically, the group wants to change the system so that individuals contribute more to their own pensions.
The Kentucky Retirement Systems board in November called for higher individual contributions to the state employee pension programs next year, even as lawmakers are not expected to fully fund benefits amid continuing budget problems. An independent actuary report to KRS trustees on Thursday showed that unfunded pension and insurance liabilities for the state have ballooned to more than $12 billion this fiscal year and that drastic increases in the state’s contribution rates are needed to fully fund retirement obligations in fiscal year 2012-13, which begins July 1.
Pension costs for municipal employees have risen dramatically in recent years, as well. But unlike the state system, city and county governments receive a bill every year that must be paid, which means that system is well funded.
Louisville paid about $70 million in pension costs this year.
Chris Poynter, a spokesman for Mayor Greg Fischer, agreed that the system needs to change.
“That’s a debate we at city government have been having for several years now,” Poynter said. “We’ve got to do something with pension costs, because cities can no longer afford the bill without significant cuts in other areas.”
Tobin said she hopes Kentucky’s legislature will change the law to make pension payments a public record, but said her group will launch a grass-roots campaign to try to force the issue if that doesn’t happen.
Currently, the public can only get information about individual pension payouts if the recipient agrees to allow the release of the information, Tobin said.

Findings from TUA’s pension project on Covington, Kentucky, are featured in this article at Cincinnati.com.
COVINGTON— Dozens of Northern Kentucky public employees will be “pension millionaires” once they retire, according to estimates released by a national anti-tax group.
The Chicago-based Taxpayers United of America looked at employees of Boone County, Kenton County, the counties’ school districts and Florence. The group’s vice president, Christina Tobin, used a press conference on Tuesday at the Courtyard by Marriott to accuse Covington officials of refusing to provide salary information for their current employees.
Covington City Solicitor Frank Warnock said he provided the group a list of city positions and the salaries for those jobs. He said the city didn’t put names to its more than 300 positions. Warnock said to create such a list would be time-consuming and not necessarily required under state open records law.
He called the group’s press conference “manufactured drama.”
“This is like hitting somebody below the belt,” Warnock said of the group’s criticism of the city.
He said the group employs “low rent” ways to draw attention to its cause instead of trying to work with government officials to solve problems.
Tobin admitted county and municipal governments do not make the rules that determine pension benefits but that her group wanted to bring attention to million-dollar pensions to a local level. She said people hear about huge unfunded pension liabilities but it is hard for them to comprehend until they see the size of the pension for their child’s fourth-grade teacher, elementary school principal or police officer.
The group is lobbying for an end to guaranteed lifetime pensions for government employees. Instead, Tobin said all new public workers should be enrolled in private savings plans, like a 401(k), and they should work until later in life, as private sector employees do.
Taxpayers don’t even know for certain who gets what because Kentucky law requires that public pension records be kept confidential. To get the estimates it released, the group used publicly available government salaries and applied the formulas of several public pension funds. It ended up with educated guesses that could be skewed by assumptions, such as how long someone works in a government job.
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.
In response to the group’s press conference, Gov. Steve Beshear released a statement highlighting changes to the pension system for new employees designed toward getting the systems to full funding.
“We are confident that by following those guidelines, the pension system will remain stable,” Beshear said.
Tobin said Kentucky residents will not know if “their house is in order” until the state makes pension records open for public inspection.
According to the group’s estimates, the highest annual pension in Boone County government is $85,816 and 24 other employees will all get more than $43,000 per year. In Kenton County government, the the top 25 pension earners range from $33,000 to $74,000.
Fifty teachers in Boone and Kenton counties will each get more than $50,000, according to the group.
In Florence, 25 employees will get annual pensions of more than $47,000, according to the group, and that the city’s top pension earner will get nearly $66,000 annually.
By contrast, residents in Boone and Kenton counties have an average wage of $40,000 and $43,000, respectively, and outside of government jobs, few people can expect to get pensions, the group claims.
“Boone and Kenton county government pension systems are making millionaires out of public employees at taxpayer expense,” Tobin said. “Although some reforms have been made to the Kentucky government employee pension systems, additional reform is critical.”