February 27, 2013

Two Kentucky Pension Bills Pass in House

A press release from the Kentucky Legislative Research Commission said the two bills aimed at solving the pension problem in Kentucky - Senate Bill 2 and House Bill 416 - were both passed by the House.

The next step is for the Kentucky Senate to take them up.

Unfunded liabilities for the pensions of over-compensated state workers has soared to approximately $30 billion, and that may be an underestimate of the underfunded pension.

Per the two bills, the state or local government workers would be required to pay the actuarial required contribution to the public pension systems administered by the Kentucky Retirement Systems, starting in fiscal 2014.

The annual cost to the state of Kentucky will be $100 million a year.

Funding for the pension would come from instant racing games offered at racetracks and newly instituted Keno lottery games.
Lawmakers expect it to take anywhere from about 5 to 10 years for the funding to mature, and from there it'll take care of itself.

This is just another kicking of the can down the road, as the number of state employees entering retirement will continue to rise, and it's likely to face a bigger crisis several years from now.

Politicians refuse to do the right thing, which would be to make state workers pay more into their own pensions.

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