Kentucky Community Mental Health Centers Testify on Pension Path Forward for Quasis

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FRANKFORT, KY –On Tuesday, September 22, 2020, Steve Shannon, Executive Director of the Kentucky Association of Regional Programs (KARP), an organization representing 11 of the Commonwealth’s Community Mental Health Centers (CMHCs), testified in front of the Public Pension Oversight Board on a compromise path forward on public pensions for CMHCs and other quasi-governmental organizations.

The proposal is largely based on a version of HB362 from the 2018 session of the General Assembly, which established exit methodology for quasis, and overwhelmingly passed both the Kentucky House & Senate, but was altered after a veto by Governor Bevin.

121 quasi-governmental organizations are currently part of the ailing Kentucky Employees Retirement System, which is the worst-funded in the nation− plagued by years of underfunding, flawed assumptions and poor investments.

Shannon testified the CMHC proposal would allow vital social safety net providers like CMHCs the ability to pay off the revised unfunded pension liability attributed by KRS in 30 years at 0 percent interest. In addition, it would keep current employees in tier 1, tier 2, or tier 3 of the Kentucky Employee Retirement System non-hazardous plan (KERS NH).

Shannon thanked members of the General Assembly for their action earlier this year to freeze the pension rate for the current fiscal year at 49.47 percent, which provided temporary cost relief for local health departments, behavioral health facilities and domestic violence shelters that have been critical in the time of the pandemic.

“The freezes have been essential stop-gap measures that have helped keep us afloat, “said Shannon. “The longer term solution I am speaking of today has, in the past, enjoyed strong support from both parties in the General Assembly,” said Shannon. “It is our hope as mental health safety net providers that members of the General Assembly will revisit this common sense compromise so CMHCs and other quasis are able to better focus resources on their core missions.  This will allow for both predictability and affordability and ensure retirees are taken care of.”

Kentucky became a leader in mental health in 1964 when the General Assembly authorized the creation of the CMHC network after the Community Mental Health Act was signed by President Kennedy.  Through the outpatient safety net centers, Kentuckians are able to access mental health, intellectual and developmental disability, and substance use disorder services regardless of their ability to pay.  In recent years, post-retirement benefits liabilities have swamped budgets for quasis charged with providing social safety net services.

CMHCs have been forced to consolidate physical infrastructure and reduce headcounts.  To stay afloat, centers shifted from individual programming to group settings, have fewer doctor-level psychologists, and less Addictionologists on staff. 

According to Mental Health America, Kentucky has the 6th-highest prevalence of mental illness in America, and CDC data showed almost 42 percent of Kentuckians indicated they had experienced symptoms of an anxiety and/or depressive disorder from July 16-21, five points higher than the national average.

About KARP:

The Kentucky Association of Regional Programs is a not-for-profit corporation representing the 11 Community Mental Health Centers located throughout Kentucky. The mission of the 11 Community Mental Health Centers is to meet the needs of Kentuckians who require services for mental illness, addiction or developmental or intellectual disabilities by ensuring access to a comprehensive and high quality system of integrated primary/behavioral health care, fulfilling statutory obligations of KRS 210.  CMHCs are outpatient safety net centers offering mental health, intellectual and developmental disability, and substance use disorder services that serve over 180,000 Kentuckians each year, regardless of their ability to pay. KARP members include Four Rivers Behavioral Health, Pennyroyal Center, RiverValley Behavioral Health, LifeSkills, Communicare, Seven Counties, NorthKey, Comprehend, Pathways, Cumberland River Behavioral Health and New Vista.


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