Kentucky pension system

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Analysts say Kentucky will need to hire more state employees or have them pay more into the retirement system in order to reverse the state’s pension crisis, painting a grim portrait of Kentucky’s main public pension system.

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Legislation backed by Kentucky Treasurer Todd Hollenbach would create a retirement savings program for Kentuckians whose employers don’t offer a plan.

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The Kentucky Chamber of Commerce wants a full performance audit of the troubled Kentucky Retirement Systems.

 Kentucky's underperforming retirement system for state employees keeps secret details of its so-called "alternative investments," and critics are calling for more transparency so the risks and potential pratfalls can be fully assessed.

In its latest story, the Kentucky Center for Investigative Reporting looks at the secrecy behind where the Kentucky Retirement Systems makes its alternative investments—and the concerns it raises.

Fitch Names KRS Pension Worst-Funded in Nation

May 20, 2014
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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. 

A Kentucky Transportation Cabinet retiree from Marshall County is on the ballot for the state pension system’s Board of Trustees.

Peter Wolff says he’s concerned about the Kentucky Employees Retirement System.

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Kentucky legislative leaders have reached agreement on a plan aimed at shoring up the state's underfunded pension systems, staving off the need for a special session of the General Assembly.

The new plan would reduce a personal tax credit of $20 to $10, generating roughly 33 million in revenue that would go to General Fund, but lawmakers would use for pensions. It would also use revenue from technical changes in the state's tax code, as well as money from federal tax changes.

Overall, the plan would generate $96 million in the 2015 fiscal year and $100 million in 2016 fiscal year.

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A House bill aiming to help generate revenues for the underfunded pension system is in legal limbo as the Senate refused to accept the bill.

House Bill 416 takes revenues from expansion of Instant Racing and online lottery sales and the start of a Keno game to generate close to $100 million a year to pay into state's currently underfunded pensions for state employees.

Revenue bills in odd-year sessions must have 60 House votes in final passage to be considered within the rules; House Bill 416 only received 52 on the floor. Because of that, the Senate clerk refused to accept the bill.

But House Speaker Greg Stumbo says the Senate should amend the bill and send it back to the House for final passage if it wants to avoid a special session.

Legislative pension reform is progressing through the Kentucky General Assembly. Senate Bill 7 would keep new legislators from participating in the Kentucky Employees Retirement System. It is aimed at preventing the addition of new burdens to Kentucky's pension system, despite the fact that legislator's pensions are generally well-funded.

Senate President Robert Stivers praised the bipartisan effort in his chamber to solve Kentucky's underfunded pension problem.

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The House has narrowly passed two bills dealing with the state's underfunded pension system, but not without controversy.

The House passed an amended  version of Senate Bill 2, which keeps the pension systems as a defined benefit and creates a new oversight panel for Kentucky's many pension plans. It passed on party lines 55-45, with Democrats favoring.

It also passed House Bill 416, which takes revenues from the potential expansion and legalization of Instant Racing, from online lottery sales and a new Keno game.

That bill passed with 52 votes, but many Republican members argued that the action was illegal, since revenue bills take a House supermajority of 60 votes to pass in odd-year session.

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