The 2019 Session adjourned on Thursday, March 14 for the ten-day veto period. The Legislature will return on March 28 for their last day to override any vetoes and to consider legislation that has not yet passed. Any override of a veto takes a 2/3 vote of each house, 51 votes of the House and 20 votes of the Senate.
There were approximately 790 bills introduced with approximately 178 passed and sent to the Governor.
There were several bills introduced that would have increased the pension exclusion back to $41,110, the amount we were allowed up to the 2018 session when it was changed. None of these bills will become law although one did pass out of the House (HB 58). The House did add this change as a floor amendment to SB 98 but it does not seem that it was passed with this provision.
There were also numerous bills introduced on sports wagering and casino gambling that would have allowed parts of the net profits to be used for funding our retirement systems. None of these bills passed.
Bills we watched affecting retirement plus many others are:
HB 80 - This was one of two housekeeping bills for KRS. This one would allow for electronic balloting for the elected Trustees while keeping the mail ballots for those wishing to vote in this manner. It also consolidates the two elections currently held to elect CERS Trustees to the same cycle beginning in 2021. Both of these measures will save KRS tens of thousands of dollars in administrative expenses. A technical clause allows the extra 1% Tier 2 and 3 employees pay for their health care to be placed directly in the retiree Health Insurance Trust Fund. This bill passed and has been sent to the Governor.
SB 168- Bill that would have disclosed retirement information of members by name upon request. This bill did not pass.
HB 358 - This controversial bill originally allowed for voluntary departure by universities from the KERS NH plan, which would have been detrimental to this plan by allowing for a 25-year pay off of their unfunded liabilities thereby increasing the overall unfunded liability. It also froze the reduced employer rate for quasi-governmental agencies at 49.47% for a second year into FY 20. There was a Senate Committee Substitute that, among other provisions, required the quasi-governmental to cease participation in KERS NH unless the agency voted to remain in the KRS plan. The House did not concur with this modification, and it was sent back to the Senate. There were ongoing discussions to resolve the disagreement(s) but nothing was put forth before the end of the day on the 14th. This bill will most certainly be taken up again on the 28th.
HB 489 – This is the second of the two housekeeping bills sought by KRS. This one would change the fiduciary code compliance for investment managers to that created by the Investment Advisors Act of 1940, commonly referred to as the SEC Codes. The Board, KRS investment staff and management would still be bound by the CFA Codes established in SB 2 from 2017.
Although none of the above bills would affect our pensions directly, we still must be very wary that anything can happen on that last day. Language in bills not passed on their own can be placed as amendments onto other bills. Bills were passed such as the tax cuts given to banks and the borrowing of money for other items could and most likely will affect our retirement underfunding. HB 358 mentioned above will most certainly hurt the underfunding of our system.