I would like to offer some suggestions to Gov. Matt Bevin and Kentucky lawmakers. Solving the Kentucky pension shortfall requires a clear understanding of this multifaceted problem. Lowell Reese wrote in 2012, “On March 8, 2005, members of the Kentucky General Assembly voted in the House and in the Senate on the same day their approval of HB 299, a bill that greatly increased their pensions.” Legislators are part-time employees and contribute into their pension based on part-time salaries. However, the passage of HB 299 changed those part-time years into full-time.
For decades, the state failed to fully fund its contribution to Kentucky Retirement Systems. State employees had money withheld from their paychecks and forwarded to the state, but the legislators voted to bypass a law requiring the matching funds be deposited into pension accounts. Many actuarial companies have devised possible solutions to the budget shortfall. I would like to know exactly how much money could be added back to the pension fund if HB 299 had not passed.
Read the Bluegrass Institute report by Reese called, “Future Shock: Kentucky Politicians’ Opulent Pensions Have Become a Modern Day Gold Rush.”