Kentucky Bill To Separate Healthy Pension System From Ailing One Put On Hold
A bill that would separate the relatively healthy retirement fund for local governments from one of the state’s ailing pension systems is dead — despite a push from local officials.
Gov. Matt Bevin announced on Thursday that he has asked bill sponsor Sen. Joe Bowen to pause the legislation.
“The most critical thing is to make sure we get this right,” Bevin said.
Bowen said he still supports the bill and argued that tabling it now would help its chances in the future.
“Actually by slowing it down we’re speeding it up. Actually by slowing it down we’re giving it more traction, and that’s a good thing,” Bowen said.
The County Employees Retirement System is one of three pension systems managed by Kentucky Retirement Systems. It includes the pensions of about 230,000 county and city employees and retirees, and has 59 percent of the money it needs to make payouts to current and future retirees.
Meanwhile, KRS’ other two pension funds are struggling: The Kentucky Employee Retirement System is 19 percent funded and covers 130,000 current or retired state employees. And the State Police Retirement System is 30 percent funded and covers about 2,500 current and retired troopers.
Bryanna Carroll, governmental affairs manager for the Kentucky League of Cities, said local officials want out because they control 73 percent of the assets and 62 percent of the membership of employees invested in KRS.
“I think the idea would be that there would be 100 percent focus and attention on the CERS plans,” Carroll said. “We are hopeful that after failed attempts to meet with the governor’s office and staff that this will now have attention and provide a full open dialogue and conversation.”
Bowen said he thinks CERS could “operate on their own.”
“Most of the assets in the KRS system are held by CERS. Their funding level is greater than any of the other pension plans that we have out there,” Bowen said. “From that standpoint they don’t want to be part of a muddled system, they don’t want to be tethered to something that they see as being really challenged right now.”
Bevin said the issue would be discussed ahead of a special session on pension solutions and tax reform, which he said would happen later this year.
This story has been updated.