With the General Assembly now in its 2013 session, Kentucky citizens can only hope that state leaders act quickly and responsibly to solve a state crisis. The unfunded liability of the Kentucky Retirement Systems is growing worse each year.
Several variables can and do affect the financial conditions of KRS, but one that has been of concern to us for nearly two decades is the legislature's intentional underfunding of employer contributions to the pension systems.
Kentucky Public Retirees has been sounding the alarm for years to state leaders about this growing crisis. The longer they kick the can down the road, the larger, more difficult and more complex the crisis becomes.
This still-growing $18 billion-plus unfunded liability creates serious jeopardy to KRS, current and retired public employees and to taxpayers.
Our No. 1 priority this year will be the support of the full funding recommended by the 2012 Task Force on Kentucky Public Pensions.
It is not fair to Kentucky taxpayers that this situation has been permitted to worsen. It also is not fair or reasonable to punish city, county and state employees and retirees who had nothing to do with this growing crisis. Kentucky's teachers, firefighters and librarians were not allowed to underfund employee contributions to the retirement systems.
Our police officers and bus drivers paid our contributions on time, every time. We have served the citizens of Kentucky with many years of dedicated service with an understanding that the state would honor its legal and moral obligations that included the promise of certain retirement benefits in accordance with law.
It was not Kentucky's nurses or law enforcement officers passed the laws that for years made increases to the various benefit plans without assuring they would be funded. And it isn't our fault that the state legislature for most of the last 20 years has chosen to underfund the recommended employer contribution rates.
The underfunding problem was compounded for years since KRS could not invest funds it never got for investment earnings.
KPR provided input to state leaders for several years as we watched them continue to underfund the retirement systems. We were pleased by the formation of the 2012 Pension Task Force and that public retirees were permitted to provide input.
We support fully funding pensions, but so many of the current recommendations fail to address this critical component — and instead place an increased burden on Kentucky taxpayers and public employees. We are opposed to legislation that will place a heavier tax burden on Kentucky taxpayers, and oppose the loss of the small annual cost of living adjustment that many retirees badly need.
Pensions are contractual, and we will oppose any legislation that breaks and dishonors the promised retirement benefits. We will also oppose any changes to the current KRS board of trustees, making it more political without doing anything to help the unfunded liability.
Members of KPR are very pleased that state leaders seem convinced that they must act quickly and responsibly to mend this huge financial crisis. We urge them to come up with valid solutions that will not punish retired senior citizens, who did not cause the problem and who served the state with dignity and years of service.
Our organization represents thousands of Kentucky public retirees across the state in the Kentucky Employees Retirement System the State Police Retirement System, and the County Employees Retirement System. On their behalf, we urge the legislature to act responsibly and with restraint.
Paul R. Guffey is president of Kentucky Public Retirees, which has 3,600 members.