The Bluegrass Institute for Public Policy Solutions released its plan for quasi-government agencies which are part of the Kentucky Retirement Systems (KRS) and which face financial ruin if action is not taken to alleviate a dramatic increase in pension payments which, unless relief is granted, must begin on July 1.
“The politicians in Frankfort are fighting over whether to allow regional state universities and quasi-governmental agencies like local health departments and rape crisis centers to leave the Kentucky Retirement System (KRS), a move that would require complex legislation and administrative changes to the state workers’ pension fund and unnecessarily cost taxpayers hundreds of millions of dollars,” Bluegrass Institute president and CEO Jim Waters said.
“The Bluegrass Institute Pension Reform Team offers a different approach that costs far less without throwing state workers or employees of the quasi-government agencies under the bus, and ensures taxpayers are protected from digging the pension hole deeper as quasi-governmental agencies continue to make needed payroll contributions to the KRS,” Waters added.
The Bluegrass Institute proposes creating the Quasi-governmental Employees Retirement System (QERS) as a separate pension plan within KRS, which would address the need for relief by these agencies while saving taxpayers a significant portion of the estimated $827 million price tag to allow the quasis to leave KRS altogether.
“Not all public retirement plans are the same,” Waters noted. “Quasi agencies have much-lower liabilities yet are forced to make disproportionately higher Annual Required Contribution (ARC) payments into the state workers’ pension system, which is teetering on the precipice of insolvency. Placing the quasis in their own plan with ARC payments based on their specific liabilities and actuarial assumptions rather than being forced to pay for the sins of the rest of the system will be their salvation.”