Kentucky

Note To Kentucky: Top Covington, Florence Area Government Pension Estimates Released

Click to view release as PDF
COVINGTON–A report released today by Taxpayers United of America (TUA) reveals that Florence, Kenton County, and Boone County government employees are not only receiving generous salaries, but that over a normal lifetime, many of these government employees when they retire will become pension millionaires. Kentucky bureaucrats refuse to release pension figures, so total pension payouts were estimated* for this report. The city of Covington refused to even provide salary information for current employees and instead provided a list of city government positions.
Click below to view the pension information:

“Boone and Kenton County taxpayers struggle through this recession with an average wage of $40,000 and $43,000, respectively, median home values of $174,100, $143,000, and 7.9% and 8.5% unemployment. Government employees really rake it in while they are employed and then when retired,” said Christina Tobin, TUA Vice President. (Read more…)

State-Journal | Group calls on Beshear to release pension info

TUA’s call for Kentucky Gov. Steve Beshear to release pension data was featured in this article on the State-Journal.

Taxpayers United of America, an anti-tax group advocating switching retirement accounts to defined-contribution systems, has asked Gov. Steve Beshear to release information on employees’ public pensions.
The Chicago-based group released its own study into pensions here, using current top salaries among state employees, university officials and teachers as well as Frankfort and Franklin County employees to calculate estimated retirement benefits.
Those earning six-figure salaries included doctors, surgeons, psychiatrists, attorneys, cabinet officials, political appointees, administrative law judges and other high-ranking positions.
The study assumed each employee would work 30 years, retire at age 52, live 23 to 32 years based on average life expectancy and earn a 2 percent cost of living adjustment each year. It also assumed that the given salary would be the average.
The report doesn’t include current retirees, certain judges, legislators or so-called “double dippers.”
Taxpayers United, which has been to Illinois, Wisconsin, Indiana, Michigan and Missouri to drum up support for 401(k)-style government retirement plans for future public employees, assumed much in its study because individual pension information is exempt from the state’s open records law.
Christina Tobin, vice president of Taxpayers United, delivered a letter to Beshear’s office, calling Kentucky one of the least cooperative states in releasing individual pension numbers.
“You (Beshear) said it will take political courage and the will to lay the foundation for a better tomorrow,” Tobin said during a press conference in reference to Beshear’s inaugural address.
“A great step toward that better tomorrow would be to release Kentucky’s pension information so that your citizens see clearly the need for immediate reform.”
Tobin said teachers and rank-and-file workers aren’t to blame for woes facing the pension system, but rather administrators with lucrative salaries who are “in bed with the union leaders, who in turn fund the wrong Democrats and Republicans for office.”
She also said current employees need to pay more into the pension system and retirees should collect Social Security, similar to workers in the private sector.
Beshear spokeswoman Kerri Richardson said reforms passed in 2008 should stabilize the pension system.
“We made significant changes to the pension system for new employees in 2008 that established a path toward getting the state’s pension systems to full funding, and corrected a number of administrative concerns that over time had weakened the health of the entire system,” Richardson said in an email.
“We are confident that by following those guidelines, the pension system will remain stable.”
The Kentucky employees and teachers retirement systems currently face a combined unfunded liability of more than $30 billion in its pension and health benefit plans, and in 2008 the legislature passed reforms to gradually increase state funding and decrease some benefits to put the systems back on solid financial footing by 2025.
Those reforms aren’t enough, said Rae Ann McNeilly, director of outreach with Taxpayers United and director of communications with the Illinois Libertarian Party.
Taxpayers United is a nonpartisan group, said Tobin, who ran for California’s secretary of state as a Libertarian in 2010. She also heads Free and Equal Inc. and the Free & Equal Elections Foundation, advocating for election reforms.
Bill Thielen, interim executive director of the Kentucky Retirement Systems, said the decision to switch to a 401(k)-style pension rests with the General Assembly, but an actuarial analysis of legislation last year showed such a change would cost the state about $7 billion over 15 years.
Costs would gradually decrease after 15 years, he said of the 25-year study.
“Whether or not they go there ultimately is a decision of the General Assembly, but they have to realize if they can’t pay the cost now, they’re going to add significant additional costs,” Thielen said of changing to a defined-contribution system.
Not everyone heralded Taxpayers United’s message.
Morehead State University history professor John Hennen, at the Capitol to protest mountaintop removal, repeatedly interjected and questioned Tobin and McNeilly on Taxpayers United’s interest in public pensions and its corporate donors.
The confrontation reached its climax when Tobin requested a Capitol security guard in the Rotunda.
Afterward, Hennen acknowledged that he tends to get “a little too excitable” and said he supports any effort to flush out abuses in the state pension system.
But he said Taxpayers United’s study focused on the high-salaried employees, not the average state worker. The corporate sector has successfully demonized public pensions and, in some cases, undermined collective bargaining, he said.
“The way they’re trying to drive a wedge between public workers and private workers is by now going to private sector employees and saying, ‘Look at these people who are robbing you, the taxpayer,’” Hennen said.
“… They picked high-dollar people who may be overpaid, depending on where they are, and their pensions may be too lucrative, but by doing that, they’re casting suspicion on all public employees, including those who take low pay work so that they can get the defined benefits.”
Statewide, 39,732 retirees and beneficiaries in the state’s non-hazardous retirement fund received an average of about $20,400 in pension payments for fiscal year 2010, according to KRS’ latest comprehensive annual financial report.
More than 44,000 retired teachers and beneficiaries got more than $29,800 yearly on average in the same fiscal year, the Kentucky Teachers’ Retirement System’s report says.
Retired teachers, unlike some state retirees, don’t receive Social Security, said Beau Barnes, deputy executive secretary of operations and general counsel for KTRS.
In Franklin County, 6,025 retirees or beneficiaries got more than $30,200 on average in fiscal year 2011, according to KRS numbers.
A move to a 401(k)-style system for future state workers likely faces an uphill battle in the upcoming legislative session. A bill calling for such a change passed the state Senate but failed to clear the House’s State Government Committee during the 2011 session.

Herald-Leader | Group highlights six-figure government pensions, calls for more transparency

Findings from TUA’s pension project on Lexington-Fayette County are featured in this article on the Herald-Leader.
Dozens of Kentucky state and Lexington city employees can look forward to six-figure government pensions every year once they retire, in some cases before their 50th birthdays, according to estimates released Monday by an anti-tax group.
However, taxpayers don’t know for certain who gets what because Kentucky law requires that public pension records be kept confidential. The Chicago-based Taxpayers United of America delivered a letter to Gov. Steve Beshear’s office on Monday calling for a repeal of that law, to make public pensions as open to outside scrutiny as public salaries.
“People hear about these huge unfunded pension liabilities, and it’s so big, it doesn’t really mean anything to them. But if you can go to them and say, ‘Here’s the size pension that your child’s fourth-grade teacher will be getting, here’s what the elementary school principal will be getting,’ it’s something they can relate to,” said Rae Ann McNeilly, the group’s director of outreach.
The group is lobbying nationally for an end to guaranteed lifetime pensions for government employees. Instead, the group said public workers should be enrolled in private savings plans, like a 401(k), they should pay a greater share of their retirement costs and they should work until later in life, as private sector employees do.
To get the estimates it released Monday, the group used publicly available government salaries and applied the formulas of several public pension funds. It ended up with educated guesses.
Gov. Steve Beshear, for example, will get an estimated $96,191 a year in retirement, less than some of his top aides and political appointees, the group said. Beshear’s office did not dispute the group’s estimate of his pension.
“In the past year, we have traveled to many states to research and publicize public employee pensions. We have often found that government pensions are higher than private sector salaries,” the group’s vice president, Christina Tobin, wrote to Beshear. “Sadly, one of the least cooperative states has been Kentucky.”
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, diverting money from other services to honor the pledge of lifetime benefits.
In the legislature, Senate Republicans have pushed for private retirement plans for future state workers, arguing that the present model cannot be sustained. House Democrats have blocked that measure.
A spokeswoman for Beshear on Monday did not address the issue of public pension confidentiality. But the chairmen of the legislative committees on state government said they’re open to change.
“I’ve been an advocate for more transparency and accountability in all aspects of government, including our pensions, and I think this group has a good point,” said state Sen. Damon Thayer, R-Georgetown. “You would see greater demand for pension reform if people had more information about the amount of money that public employees are collecting in their retirements.”
Rep. Mike Cherry, D-Princeton, said he needs more information before committing, but added, “It’s worth considering. Most everything we do now is supposed to be transparent, and I don’t have any problem with that.”
According to the anti-tax group’s estimates, Kentucky’s largest public pensions — 46 of them at $200,000 a year or higher — will go to doctors, scientists, sports coaches and administrators at the state universities.
Away from the college campuses, 18 state employees (mostly political appointees at the Cabinet for Economic Development, Health and Family Services Cabinet and the Justice Cabinet) and 10 city employees (all of them police officers and firefighters at the rank of lieutenant or higher) will get annual pensions of more than $100,000, the group said.
Statewide, two dozen school teachers will get more than $60,000 a year, including six in Fayette County, the group said.By contrast, Kentucky’s average wage for a worker is $38,000 a year, and outside of government jobs, few people can expect to get pensions anymore, the group said.

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Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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