Not over yet. Lawmaker says work 'has just begun' on fixing Kentucky Retirement System
04/17/2013 08:50 AM
The agreement on how to change the Kentucky Retirement System and pay for increased contributions into the pension fund was heralded as the crowning moment of the 2013 legislative session.
But stopping the financial bleeding within the retirement system didn’t solve all of the problems that years of underfunding and under-performing investments created. The mental health agency Seven County Services filed for bankruptcy relief in early April, according to the Courier-Journal, because of rising pension costs.
State Sen. Jimmy Higdon, R-Lebanon, served on the interim public pension task force in 2012. The General Assembly approved most of the changes that bi-partisan task force recommended, although House Democrats held out for a funding source to pay the state’s increased share.
But when it comes to the pension problems non-profits like Seven Counties are facing Higdon said, “our work is not done. It’s only just begun.”
“There was a lot more that could be done, but you have to do what you can be realistic about what you can accomplish, and I think we were in this instance,” Higdon said. “You’ve seen a lot of editorials about this fix and criticizing what we did, and a lot of those would be if we didn’t intended to go further would be correct.”
Higdon said there are more bills yet to be filed in the 2014 session, including a bill which would allow legislators to opt out of their legislative pensions.
“Currently, if any legislator took a higher paying job in state government or ran for higher paying office, they couldn’t make the pledge to not take the higher retirement because they’re locked into it,” Higdon said. “We had a bill in the Senate that would allow you to be able to opt out of that. That passed out of the Senate and wasn’t acted on in the House.”
The General Assembly used a half dozen of the more than 50 proposals from the Blue Ribbon Commission on Tax Reform to create $100 million in new revenue to pay down the required contributions into the retirement system.
But Higdon said he hopes that doesn’t mean the end of attempts to modernize Kentucky’s tax structure.
“Somewhere somehow we need to have a serious discussion about tax reform,” Higdon said. “Will that be next session, I don’t know?”
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