Bill which addresses Kentucky Teachers Retirement System shortfall, without bond proposal, passes Senate
03/10/2015 06:49 PM
FRANKFORT – The Senate has passed House Bill 4, minus the $3.3 billion bond proposal to help the Kentucky Teacher’s Retirement System which was passed by the House, by a 26 to 10 vote on Tuesday.
The Senate’s amended version would set up a task force to fully study the system during the interim and come back with recommendations by mid-December of this year.
Senate President Robert Stivers, R-Manchester, said the plan will allow careful study would lead to a well thought out plan.
“There may be financial recommendations of additional contributions, there may be oversight recommendations, there may be systemic changes that need to take place,” Stivers said.
Senate Minority Floor Leader. Ray Jones, D-Pikeville, felt that the state was missing out on an golden opportunity with the current low interest rates, by not going the bonds route.
“The point I’m making is, when you borrow money, you do it when interest rates are low and that time is now,” Jones said. “Postponing this decision until a study is done, most likely will lead to substantially higher interest rates and will eventually cost the taxpayers of this commonwealth hundreds of millions dollars more than if we did the bond issue this year.”
Sen. Damon Thayer, R-Georgetown, who served as a member of the Public Pension Task Force in 2012, says the approach of studying the situation and making recommendations would mirror the process used in 2012, and is the right way to go now for the Kentucky Teacher’s Retirement System.”
“We need to have the same sort of study of the teacher’s retirement system before we rush head long to a $3.3 billion bond,” Thayer said. “ We need to look at what’s happened in other states like Illinois that has the worst funded public pension system in the country.”
The amended bill now goes back to the House.
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