Business groups to Ky. lawmakers: Pass pension reforms in 2013 ... please
02/01/2013 11:03 AM
UPDATED: A coalition of business groups underscored their message to lawmakers on Friday that the 2013 General Assembly must pass reforms to the state’s main public pension system before it goes broke, which would put Kentucky’s economy at risk.
The press conference comes on the heels of an announcement that Standard & Poor’s Rating Service has downgraded Kentucky’s economic outlook from stable to negative, due to the pension funding crisis.
Senate Majority Floor Leader Damon Thayer, the sponsor of SB-2 which will be the pension reform bill said the Senate was committed to passing that legislation.
“We need to tackle the pension problem on two levels. The Senate is committed to passing Senate Bill 2, the recommendations of the bipartisan pension task force which include fully funding the ARC, next week upon our return to Frankfort because it is important that the General Assembly make systemic changes to the retirement system,” Thayer said in a statement.
Jim Carroll, is spokesman for a group of state government retirees sent out a statement expressing the urgent need for the General Assembly to act promptly to fully fund Kentucky’s public pension system.
“So-called pension reform legislation expected to be introduced next week will simply state the intention of the legislature to accelerate payments. It is therefore as meaningless as the existing state law that already mandates these payments and has been disregarded by the legislature for years,” Carroll said in a statement.
Thayer said the funding portion of the bill would be done during the normal budget process in the 2014 legislative session.
Business groups, led by the Kentucky Chamber of Commerce President Dave Adkisson, told the media in Frankfort that lawmakers should pass comprehensive reforms suggested last fall by the legislature’s public employee pension task force.
Suggestions from the task force on Kentucky pensions called for lawmakers to make the full payment to the Kentucky Retirement System for the first time in more than a decade. That fund covers retirement benefits for state, county and city employees and the Kentucky State Police. Making the full payment in the next budget would require lawmakers to find more than $300 million more to go from $505 million to more than $830 million for fiscal year 2015.
The Kentucky Retirement System has an unfunded liability of $18 billion in pension payments and health care obligations for retirees, combined.
Another key recommendation would be to change how benefits for future state, county and city employees are calculated. Future employees would have a hybrid-type account in which money the state and the employee have diverted would collect 4 percent interest. And, repealing automatic cost of living adjustments that are currently set to bump up pension check amounts by 1.5 percent in order to keep up with inflation.
“It is imperative that Kentucky lawmakers enact these recommendations in their entirety,” Adkisson said in a statement.
The National Federation of Independent Businesses, the Associated General Contractors of Kentucky, and 50 other groups joined with the chamber to ask lawmakers to pass reforms.
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