The Kentucky attorney general and the general counsel for the governor met Thursday in Franklin County Court.
Attorney General Andy Beshear is suing Gov. Matt Bevin over the passage of Senate Bill 151, which is the pension reform bill.
Bevin signed the bill earlier this year.
The bill, originally filed as a waterwater sewage bill, was passed through the legislature at the last minute.
It makes a number of changes to pensions for public employees.
For newly hired teachers, the pension has been replaced with a hybrid system and the new law changes the way sick days can be used to calculate retirement benefits.
"It is wrong that they tired to pass this pension law and sneak it in as a sewage bill," said Daisey Weber, a teacher who rallied outside the courtroom before the hearing.