Now competing with pension system for dollars, UofL's Ramsey once backed shorting the system

01/28/2013 08:59 AM

The presidents of Kentucky’s public universities have seen their state funding backslide to levels from six or seven years ago and could see them erode further if lawmakers decide to divert more money to the public employee pension system.

So the University of Louisville’s president, James Ramsey, now finds his institution potentially losing out on state money partially because of decisions he helped make more than a decade ago.

Ramsey served as state budget director for Gov. Paul Patton until 2002. That year, Patton called for reducing the amount the state would pay into the Kentucky Retirement System, which covers pensions for state, city and county workers and the state police.

At the time, Patton and Ramsey said it was a one-time move meant to free up money for other programs and would in no way jeopardize the solvency of the retirement fund. The problem, though, is that lawmakers and governors for the next five two-year state budgets never authorized the full payment to the pension systems again.

And now the Kentucky Retirement System is about five years away from going bust. That’s why a legislative panel has called for finding an extra $300 million for the 2015 fiscal year so that Kentucky can make its full payment and stop the financial bleeding.

So while Ramsey was in studio earlier this month, I asked he thinks the state should do to shore itself up financially and whether, in retrospect, it was a mistake to short the state’s payment into the retirement system. Here’s that interview:

About Ryan Alessi

Ryan Alessi joined cn|2 in May 2010 as senior managing editor and host of Pure Politics. He has covered politics for more than 10 years, including 7 years as a reporter for the Lexington Herald-Leader. Follow Ryan on Twitter @cn2Alessi. Ryan can be reached at 502-792-1135 or ryan.alessi@twcnews.com.

Comments

  • viewer wrote on January 28, 2013 09:24 AM :

    Someone help me here. The UL graduation rate is less than 25percent. So does that mean that 75percent have student debt and no degree ??? Im not being smart here, just asking a question.

  • Cumberland Gap wrote on January 28, 2013 09:45 AM :

    Will employees eventually realize they can’t have the same sweetheart deal in today’s environment? I guess the better question is will lawmakers?

  • Chris Tobe wrote on January 28, 2013 10:23 AM :

    Ramsey opened the door for Patton, but Fletcher and Beshear continued this horrible practice. HB1 in 2008 did not fix the pension problem, in fact it locked in its destruction by blessing this budget game started by Ramsey to dig the whole deeper for years, by continuing to not pay the full ARC. It tricked the public into thinking they were filling the hole, by just slowly reducing the rate they were digging each year and calling that a big improvement.

  • John wrote on January 28, 2013 10:45 AM :

    Wow, this guy is unbelievable. NO dental, NO vision, NO match for our 401(k), NO decent raise for 12 years, and we’re already dramatically underpaid compared to the private sector.

    and this guy wants to reduce benefits even more. What else is left??

  • Paul Patton wrote on January 28, 2013 12:35 PM :

    Ryan, Dr. Ramsey is corrrect. The retirement system had received a large payment, i think in the range of 40 million dollars, from bluecross which had not been factored into the actuarial evaluation. The fact is that state money had paid for the health insurance and we felt should be credited to the states contribution. Counting this payment the fund received all the money the actuaries had determined was necessary.

  • John John wrote on January 28, 2013 08:14 PM :

    Dear John

    You are the one who is unbelievable. A small %age of those working in the private sector have dental or vision coverage due to the low cost/benefit of those plans. The university “matches” your State retirement at a rate 3 times the amount you have to contribute. No private sector company does that, let alone a side match to a 401(k) ,a second retirement for you. I have seen university compensation figures and a few thousand tax returns and find your “dramatically underpaid” comment to be hilarious. Just have to close with the expected question. If it sooooo bad at U of L and sooooo good in the private sector, why don’t you……?
  • Paula wrote on January 29, 2013 10:16 AM :

    Everyone I’ve seen so far comment publicly on this topic has not explained “the rest of the story,” as to why the systems are in such bad shape. Governor Wilkinson was the first to “short” the systems; however, at that time there was a difference between the actuarially required rate and what KRS requested. Governor Wilkinson funded the actuarilly required rate but set the precedent for “shorting” the systems. There was a lawsuit over it, filed by KRS, with the KY Supreme Court ruling that until harm could be shown to the systems, it was not illegal. I don’t understand why another suit hasn’t been filed since it is now abundantly apparent that the systems ARE being harmed.

    The problems today result from a variety of factors, and all involved (KRS, KY Governors, the General Assembly, and the economy) have contributed to the disaster. Unfortunately, leaders in the General Assembly now feel that they can put off dealing with this yet another year, continuing to exacerbate the problems. The only hope current retirees have is that those same leaders are going to draw ridulously lucrative pensions themselves from the systems and thus have a vested interest in fixing the problem – someday.

What do you have to say?





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