By Jeff Hoover
Over the past decade, the issue of state pensions has come to the forefront, as the gap in promised benefits and the resources set aside to fund them has continuously expanded. Many states, including Kentucky, have required action on this issue before the system completely collapses.
I am proud the 2013 General Assembly took the bold steps of increasing our financial contribution and revising benefits for new employees in an effort to preserve the system. However, an important segment of the pension issue was left unchanged.
The Kentucky Teachers' Retirement System continues to operate as it did prior to 2013, yet the data demonstrates that there is cause for concern with this system that needs to be addressed before it collapses.
The Comprehensive Annual Financial Report issued by KTRS in December shows the system had approximately 75,000 active and 47,000 retired members. The funding level this past year was 51.9 percent, with $13.85 billion in unfunded liabilities.
According to data released by the Kentucky Chamber of Commerce last week, a key reason for underfunding is actual employer contributions have been significantly less than the amount required to sustain financial obligations.
Put simply, unless the situation is rectified in the immediate future, the system will be unable to meet the obligations we have to our retired teachers and administrators.
In January, the Kentucky Chamber called on the General Assembly to undertake a bipartisan review of KTRS to recommend a sustainable path forward. I introduced House Concurrent Resolution 179 to establish a task force to develop recommendations concerning the benefits, investments and funding. A report would have been required by Dec. 1, 2014, giving ample time for it to be addressed by the 2015 General Assembly.
Unfortunately, as has been all too common with issues of importance, Speaker Greg Stumbo and the other members of House Democratic leadership would not even allow a hearing on this legislation, much less a vote.
Much like comprehensive tax reform, the expansion of broadband services and public-private partnership legislation, this issue died as the General Assembly shirked our responsibility.
It is just one more example of why there needs to be a change of leadership in the Kentucky House.