Bevin administration asks for second chance at cost of KTRS plan

11/14/2017 01:43 PM

A day after denying the public access to the cost scoring analysis of the Kentucky Retirement Systems, now the Bevin administration is asking for a mulligan on the Kentucky Teachers’ Retirement cost analysis.

The Associated Press previously reported the KTRS plan would cost an extra $4.4 billion over the next 20 years. Bevin’s administration now contends that the consulting firm Cavanaugh Macdonald used different assumptions to calculate the cost for the teacher’s retirement plan.

On Tuesday, State Budget Director John Chilton called on the firm to redo its analysis of the Teacher Retirement System pension bill “utilizing a more appropriate set of assumptions for comparative purposes,” according to a news release.

Chilton is also asking for the analysis to take a 30-year look at the issue, rather than the 20-year analysis required under statute.

“The actuarial assumptions in Cavanaugh Macdonald’s most recent report are significantly different from those in the actuarial calculations provided to our consultants during the planning process,” Chilton said in a news release. “In the past, a lack of realistic and rational actuarial assumptions helped obscure the distressed financial status of the plans and contributed to the long-term unsustainability of the plans. We will ask Cavanaugh Macdonald to prepare calculations with several alternative assumptions so that policy makers can make informed decisions based on scenarios that include realistic assumptions and that are satisfactorily reconciled with those that Cavanaugh Macdonald provided in the past.”

According to the news release the new calculations will better help state lawmakers consider the proposal.

“There is no one single scenario that can be known in advance, and a recalculation of the analysis based upon the request provided by Director Chilton will provide a more complete picture of what the possible outcomes will be realized from the pension proposal,” the news release said.

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