Benefit cutbacks discussed

By BETH CRACE State Journal Staff Writer Published:

Future state employees could have to wait a little longer to retire under proposed changes to employee benefits.

In addition, the amount the state chips in for retirees' medical insurance could be reduced, disability would be capped, and purchased service wouldn't apply toward retirement and insurance benefits.

On Monday, the Interim Joint Committee on State Government discussed possible changes to the state employee benefits package. The changes, which likely will be introduced in legislation when the General Assembly convenes in January, are being proposed as a way to cap skyrocketing retirement benefits.

"We're going to have to do something," said Rep. Derrick Graham, a Frankfort Democrat who represents a large constituency of state workers. "If we don't, those (employees) who are currently in the system will be impacted."

Some forecast that over the next 10 years, nearly 8 percent of the state general and road fund could go toward retirement benefits.

If the changes discussed Monday are approved, only new employees hired Aug. 1, 2004 or after would be affected. The changes would apply to all three of the state retirement systems - the Kentucky Employee Retirement System (KERS), County Employee Retirement System (CERS) and State Police Retirement System (SPRS).

Under the proposed changes, nonhazardous-duty employees could not retire from state government until age 55 and hazardous employees, 50. Current benefits allow employees to retire with 25 years of service (with reduced benefits) and 27 years of service (unreduced) regardless of age.

In addition, purchased service, the practice that allows workers to buy years of employment for early retirement, couldn't be applied toward retirement and insurance benefits. Right now, employees can purchase time to retire early, plus 20 years for insurance benefits.

Changes also are proposed for medical insurance and disability for retirees. Proposals for retiree insurance would allow the state to pay $10 toward every year of service for nonhazardous-duty employees and $15 for hazardous-duty employees (i.e. a nonhazardous-duty employee who worked 27 years would get $270 a month on the monthly premium).

For more on this story, see the latest State Journal.

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