This is in response to your editorial “Pension plan stiffs retirees, helps who?” It is important to note the omission of any reference to the impact of pension reform on Kentucky workers and taxpayers. To put our pension deficit in context, our estimates show that the current unfunded pension liability is over $60 billion. Contrast this amount with 2016 general fund revenue of just over $10 billion, and it’s clear we have a huge problem.
Paying off the unfunded liability and honoring benefits that have already been earned by state workers will be an extraordinary effort, considering funding also needs to be found for essential state services such as education, health care and infrastructure.
To this point, state employees have resisted even the slightest adjustment to future unearned pension benefits, even though past benefits have been guaranteed at great cost. Kentuckians are going to have to ask themselves if they are willing to pay more in taxes without asking state employees to reciprocate by accepting reasonable changes to future benefits and installing safeguards so that this never happens again.
Bluegrass Institute Pension Reform Team