Legislation that would reform the pension system for state and local government retirees in Kentucky has cleared the Senate.
The proposal would create a 401(k)-like hybrid retirement plan for new employees. It also would eliminate cost-of-living increases for retirees already drawing benefits.
The Senate voted 33-5 to pass the plan, which contains recommendations from a legislative task force that reviewed the financially troubled pension system. The pension system has a $33 billion unfunded liability.
The legislation also calls for the state to begin paying its full contribution beginning next fiscal year. That means lawmakers would have to find more than $200 million a year in additional funds for the pension system.
The measure now goes to the House for consideration.