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Stumbo Addresses Kentucky Teacher Pension

LRC Public Information

Kentucky's state-funded teacher pensions are in a $14 billion hole and House Speaker Greg Stumbo says he has a plan to address the shortfall.

Stumbo says the state could re-invest in the underfunded Kentucky Teacher Retirement System by allowing KTRS to issue $3.3 billion worth of bonds. 

On Friday, he filed a bill that would do exactly that, a measure he says would allow KTRS to take advantage of current 5 % federal interest rates.

"The window of opportunity that exists to issue these bonds is limited because it's the rate that's what makes it attractive. If the rate, then the payback, the payment--just like on your mortgage--the payments low enough to make it feasible,” Stumbo said. “If the rate accelerates to 10 point or 8%, then it becomes less feasible and probably not attractive."

Right now, KTRS only has enough money to pay out 54 percent of future benefits to retiring teachers.

Stumbo's bill will be sent to a committee when the legislature convenes on February 3 for Part II of the 2015 session. 

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