Kentucky lawmakers continue to work on implementing a fix to the state's troubled pension system, and they've been warned that failure will lead to dire consequences.
The heads of Kentucky Retirement Systems and the Kentucky Teachers Retirement System testified before the Joint Committee on State Government yesterday.
The KRS is busy implementing legislation passed this year to reconcile a $23 billion shortfall in its employee pension fund.
And Gary Harbin with the teachers fund said that if lawmakers fail to implement a plan to shore up the nearly $1 billion shortfall with his group, then a new federal accounting standard could cause that debt to grow exponentially.
“That’s going to cause our unfunded liability, as reported on the employer’s books, which is the state of Kentucky, that unfunded liability would move from $12 billion, as of June 30 of last year, up to $23 billion," Harbin said.
Lawmakers at the meeting were wary about tackling the teachers pension fund, but they agreed that it needs to be addressed somehow sooner rather than later.