TheStreet.com recently published its list of the ten states whose pension systems are the worst-off. No surprise, Kentucky is identified as one of those states. The article even sites the Bluegrass Institute as one of the organizations calling for reform:
According to the Pew Center on the States, a nonprofit division of The Pew Charitable Trusts, Kentucky’s six pension systems had a combined funding level of 63.8% last year. Unfunded liabilities for pensions and health care benefits are at about 31%.
Fiscal watchdogs such as the conservative Bluegrass Institute have pointed out that the problems inherent in having an unfunded liability that is 234% of payroll are even more staggering considering that as recently as 2001, these plans were very well funded, at 110%. Fueling the funding decline has been a lack of funding cost-of-living increases.
In fact we have been pointing out these problems for quite some time now. Most recently we discussed Kentucky’s pension crisis in our Future Shock report.
We need bold leadership to introduce bold solutions within a bold time-frame. If not, Kentucky’s pension debt could sink the state.