By Randolph Wieck. Originally published in the newsletter of the Louisville Chapter of the Fellowship of Reconciliation
Dry swimming pools? Locked libraries? Fewer police?
For years, many Kentuckians have carried on with our daily lives and not really taken notice of the titanic financial iceberg rising on our horizon: the plundered public pensions of teachers and government workers. Our eyes glazed over; now, perhaps the scales begin to fall away.
As of June, 2019 Governor Matt Bevin and the state legislature are racing the clock to arrange a special legislative session to prevent the July 1st fiscal hammer from falling on what are called the “quasi” governmental agencies which will be required to pay some 80 percent (!) of their annual budgets into the pension funds – pension funds that suffer the results of years of deliberate funding shortages by the state, and the continuing burden of secret, no-bid, high-fee private equity investments, which investments are an inherently illegal use of public money.
But in 2015, didn’t Governor Bevin promise to address pension plunder?
In reality, when the numbers are examined, he has only made it worse by claiming— falsely—that he has fully funded the pensions. Names swirling in the press and the public arena are the Mayberry lawsuit; Judge Pamela Goodwine, who oversaw the vacating of the Mayberry transparency suit; Judge Gregory van Tatenhove and Bevin cabinet member Christy Trout van Tatenhove (forever linked in a major judicial conflict of interest in the Wieck v. Bevin lawsuit); Tim Longmeyer, former Assistant Attorney General, now a federal prisoner; Neil Ramsey, who sold Governor Bevin a $3-million-dollar-Anchorage, KY home for half-price, and then was named by Bevin to the Board of Trustees of the Kentucky Retirement System after having invested $300K in a company the Governor partly owns; and Brent McKim, eternal JCTA president who counter-intuitively thwarts teacher pension transparency.
A can of worms indeed, roiling with corruption with which Governor Bevin has been complicit.
Another name in the public arena is Attorney General Andy Beshear (now a primary candidate for Governor) who has twice sued Governor Bevin—and prevailed—over the Governor’s attempts to essentially privatize the pensions by giving new hires a 401K-style pension to replace the current defined benefit scheme.
The current defined-benefit type of plan guarantees retirees a set amount for the duration of their retirement, and it is sustainable when states (such as Wisconsin and Tennessee) put in the required annual sums to keep the plans solvent. Kentucky has not honored that requirement, and now claims the plans were never sustainable. (If you believe that, I have land in Florida for sale: ocean view and cheap!)
New hires—essential to the pensions for the payments they contribute which partly fund current retirees—are being clipped from the plan and shoved into 401K plans which will yield secret fees for the plan managers.
Yikes… where does this nonsense stop?
Back to the swimming pools: Drowning in debt, and under fire (continued national credit downgrades attest to that) for shirking its duty to maintain healthy pension plans unlike other states, Kentucky has decided to duck a bullet.
Kentucky cannot declare bankruptcy, but, if Kentucky refuses to put the necessary money into the pensions, then who is to do it? Should anyone? Kentucky could try to break the agreement, and stiff the retirees.
No: The solution by Governor Bevin, rather than raise new revenue, is to force the needed additional payments into the pension onto the cities and localities around the state; cities and localities can declare bankruptcy, and they can break the original agreement with the retirees and, therefore, they can stiff them. This has already happened in Detroit.
The Bevin administration and its legislative valets are attempting this in Kentucky, and voila, the defined benefit plan will be dead; long live the new, money-manager profitable, privatized 401k-style retirement. The death throe twitch by the localities such as Louisville, of course, caught in this web of corruption – is to attempt to raise cash by closing pools, postpone hiring new police recruits, and by closing libraries.
That might work once.
A teacher for 28 years at the university and high school levels, and currently teaching U.S. History at duPont Manual High School, Dr. Randolph Wieck holds degrees from Amherst College and the London School of Economics. He is a co-founder of TRELF, Teacher Retirement Legal Fund which has filed 3 legal actions on behalf of Kentucky’s public school teachers aimed at stopping public pension plunder.new hires a 401K-style pension to replace the current defined benefit scheme.