Kentucky’s ailing pension system is among the worst-funded in the nation, but former Democratic Governor Steve Beshear accuses the current administration of scare tactics.
Beshear says the state’s unfunded liability is serious, but questions the accuracy of estimates that put the liability at $40 billion. He says the number is a guess by actuaries based on scenarios that may or may not happen. Beshear accuses leaders in Frankfort of “jimmying the numbers.”
"They want to make it look even worse than what it may be, so they're changing the interest rate and other assumptions so that number keeps growing up," Beshear said. "I can tell state workers and retirees right now that nobody's going to lose their pension."
In a statement, the Republican Party of Kentucky said Beshear’s “eight years of poor stewardship are part of the reason we are in this mess”. The shortfall is blamed on several factors, including inadequate contributions by the state and poor investment returns.
Moody’s downgraded the state’s credit rating last week and raised concerns about the state not generating enough revenue to reverse the pension deficit. Governor Matt Bevin plans to call a special legislative session this fall to address pension and tax reform.