Kentucky’s largest pension plan for state workers needs a major cash infusion, more so than lawmakers had planned.
The KRS Board of Trustees met Thursday and said the latest estimates will mean higher than expected contributions from the state in the next budget cycle.
Based on current projections, the Kentucky Employee Retirement System, or KERS, will need about $95 million each year in additional taxpayer funding in order to honor commitments made last year to fully fund pensions.
"It is a daunting task in large measure," said State Senator Joe Bowen. "However, I am of the school that in a $20 billion budget, we can find significant efficiencies and savings. 'Will we have to make tough choices?' Yes."
Bowen, a Republican from Owensboro, co-chairs the Pension Oversight Committee. He told WKU Public Radio he doesn’t support using bonds to help shore up the pension plan. "Opening up a Master Card to pay off a Visa doesn't make a lot of sense to me," he added.
KERS has only about 21 percent of the money it needs to pay future pension obligations. It’s ranked among the worst-funded plans in the country.
Bowen said there is a silver lining to Kentucky's chronically under-funded pension system. The other four plans within the overall KRS system are not in as dire straits.
