A group of Kentucky lawmakers has a new summer assignment: shoring up the state’s failing pension systems. At least two of Kentucky’s six pension plans are at a high risk for failure. And their troubles have been highlighted by Bloomberg, the New York Times and the Pew Center.
In response, the state has formed a public pension task force. Co-chairman Mike Cherry says he's dedicated to find a solution, and it may not be pretty.
“From my standpoint, everything’s on the table for this summer interim session,” he says.
In recent years, lawmakers have clashed on pension reform. The Republican-controlled Senate has preferred starting 401k-style plans for state workers, but the Democratic-controlled House has rejected that idea.
The task force's objective is to piece together the opposing viewpoints to find solutions. At the first meeting, they heard testimony from representatives of Kentucky Retirement Systems and also two national groups that have offered help: the Pew Center and the Laura and John Arnold Foundation.
David Draine of the Pew Center laid out Kentucky’s issues at the meeting.
“Like many states, Kentucky is on an unsustainable course regarding its pension benefits. In 2000, the state plans had a 2 billion dollar surplus. In 2011, it faces a 19 billion dollar shortfall between what was promised for pension benefits and what was actually set aside for that bill,” he says/
Task force members say they will initially ignore the teachers, state police, judicial and legislative pension plans, because those situations aren’t as dire.
They hope to present bipartisan recommendations for potential legislation by December.