A researcher for the PEW Center on the States says Kentucky could potentially save more than $1 billion and lock in future payments to its employee pension system to prevent lawmakers from shirking their financial obligations to the system.
John Draine on Tuesday told a legislative task force looking at ways to shore up Kentucky’s underfunded employee pension funds that “issuing $1.37 billion in bonds would reduce the value of future contribution costs by about $1.38 billion” under current actuarial forecasts.
Using more pessimistic forecasts Draine still estimates “the value of savings to be $1.19 billion.”
Kentucky’s State Employee Retirement System has about $12 billion in unfunded liabilities. But the KERS system is just one part of the state’s pension system. When systems for state police, county employees and teachers are combined, the total unfunded liability is more than $30 billion.
Part of the problem has been underperforming investments during the recession but an equal contributor has been the failure of the General Assembly to fully fund the system on an annual basis for the past several years.
For the full story, read the Sept. 19 print or e-Edition of the Glasgow Daily Times.