Governing.com reports that Kentucky’s local government leaders “are far less impressed” than Gov. Steve Beshear with Senate Bill 2 (which did so little we can’t, in good conscience, call it “reform”) passed last week by the Kentucky General Assembly.
Beshear called it “a good solution.” Good, perhaps, for the next political campaign, but not for Kentucky’s local governments.
As if its nearly $34 billion unfunded liability is not enough reason for grave concern about the viability and sustainability of the Kentucky Retirement System, the fact that the County Employees Retirement System (CERS) has, unlike the state, been fully funding its pensions yet is “only slightly more than 60 percent funded” should cause most Kentucky taxpayers to at least wonder what is that good about Senate Bill 2.
Actuaries say healthy funds are at least 80 percent funded. Yet the state’s own pension board sets the rate at which local governments must fund their pension systems each year, and still they fall way short of the levels needed to be considered healthy.
“We don’t set our contribution rate every year, the pension board sets rate,” Boone County Judge-Executive Gary Moore told Governing.com. “In theory they’ve been charging us our full actuarial rate every year so you stop and scratch your head and say, how are you guys $6 billion underfunded?”
The Bluegrass Institute will release a list of 16 recommended solutions that, if followed, actually would fix the state’s pension problems. Among those will be recommendations on how to make public pension boards more independent and financially sound.
Read recent Bluegrass Institute reports by Lowell Reese on the commonwealth’s pension crisis here.