Bevin's Pension Plan Will Bankrupt the State

Don't believe me; listen to the states who tried the same plan.

In the 1990s, both West Virginia and Michigan closed public pension plans. West Virginia was first, closing its teacher pension plan in 1991. All new teachers were placed in a 401(k)-style defined contribution plan. In 1997, Michigan closed its traditional pension plan for state government employees. What happened next is a warning to other states or cities considering a similar course.

After closing the pension plan, two things happened in both states: the cost of the plan increased dramatically and retirement security for employees plummeted. As plan costs skyrocketed in West Virginia, the state began studying its options.

In 2003, West Virginia found that providing a pension to teachers cost taxpayers half the amount of a comparable 401(k)-style plan. After 15 years, West Virginia reopened the pension plan for new teachers and gave teachers in the 401(k) plan an option to switch into the pension plan. Over 78 percent of teachers switched to the pension plan.

Michigan, too, has seen plan costs increase and funding levels decrease. But worst of all, Michigan is forcing its state employees to retire into poverty rather than providing a modest, reliable defined benefit.

And yeah, of course Bevin's lying about the real cost.

Kentucky’s General Assembly will need to find an estimated $5.4 billion to fund the pension systems for state workers and school teachers in the next two-year state budget, officials told the Public Pension Oversight Board on Monday.

That amount would be a hefty funding increase and a painful squeeze for a state General Fund that — at about $20 billion over two years — also is expected to pay for education, prisons, social services and other state programs.

It's the fast-track to Kansas and Haiti. Pretend that fatal budget cuts, pension destruction and tax windfalls for the rich will fix Kentucky's finances. Then discover that oops, the Commonwealth can't operate with no money, so sorry, sux to be you, gotta go run for president now.