Fitch Names KRS Pension Worst-Funded in Nation
Global credit agency Fitch Ratings has named one of Kentucky’s pensions the worst in the nation. The non-hazardous pension under the Kentucky Employee Retirement System has about a quarter of the money it would need to pay out what will be owed to pensioners.
Todd Green is a senior actuary for Cavanaugh MacDonald, an accounting firm that examined five years’ worth of the state’s pension data. He says the pensions have been neglected and money hasn't been put in them and kept there.
“The source of that is the prior underfunding," Green said. "So it’s an accumulation of lots of things that weren’t being done right.”
At a recent meeting of the Kentucky Retirement Systems’ trustees, the body declined to act on recommendations that the pension downgrade its projected investment returns. Bill Thielen is the director of KRS. He says that could result in more money being paid by the legislature toward the fund.
"I think the board is always concerned about the impact, not only on lawmakers, but our members and the general public," Thielen said. "They want to make sure the appropriate, prudent decision is made. Right now, they are just wanting to look at it to a greater degree."
KRS will decide whether to adopt the recommendations at its September meeting.State lawmakers shored up about 100 million dollars to put into the fund, but experts say much more is needed to get the pension back on track. Illinois’ State Employee Retirement came in second place, at 34.2 percent funding.