A Daviess County lawmaker isn’t surprised by a consultant’s report released this week that shows how Kentucky’s pension systems became the worst funded in the nation.
A consultant’s report released this week shows the systems combined have seen nearly $7 billion in negative cash flow since 2005, as benefits paid to retirees greatly exceeded appropriated funding.
State Senator Joe Bowen of Owensboro co-chairs the Public Pension Oversight Board. He says there are a number of reasons why the retirement plans got into the current crisis.
For one, the state has been basing contributions to pension plans on a level percent of payroll rather than a level dollar.
"We funded based on an anticipation of payroll growth that never happened," Bowen told WKU Public Radio. "Instead of just a level dollar funding mechanism, we used a percent of payroll, and the payroll never happened, so we kept getting further and further behind."