Kentucky’s pension conversation has reached height of absurdity

Kentucky Today ^ | 3/11/2018 | Jordan Harris

[Republican Wildcat]

Kentucky’s never-ending saga of pension reform has reached the height of absurdity.

Anyone trying to understand Senate Bill 1, sponsored by Owensboro Republican Sen. Joe Bowen, merely by listening to the rhetoric from Kentucky labor unions would walk away with zero understanding of the bill’s contents or the larger issues at hand.

You certainly wouldn’t know that even if there was proper funding over the previous 20 years, there would still be a crisis. If you only listened to the rhetoric, you would know nothing of the disastrous structural issues that have left taxpayers footing the bill for a broken system.

By only listening to the rhetoric you would have no idea that Kentucky had a pension crisis at all. You would have no idea that a study by S&P last year found that Kentucky had the worst funded pension system in America at under 37.4 percent, barely above half the national average. You would have no idea that the plan with the worst funding, the Kentucky Employees Retirement System for non-hazardous employees, is only 17 percent funded and could completely run out of money by 2024.

You would know nothing of how recent budgets have attempted to make up ground after nearly two decades of malfeasance. You wouldn’t know that in 2014, Pew found that Kentucky was falling behind faster than any state in America at funding its pension system or that before 2016, the state had failed to fully pay its pension liability 15 out of 22 years. You wouldn’t know that since Matt Bevin took over as governor, the percentage of funding dedicated the Kentucky Teacher Retirement System in the budget has more than doubled, from only 45.6 percent of the request funded in fiscal year 2015, to 93 percent in fiscal year 2017. You wouldn’t know

[Lurker]

It’s way past time to end these public pension schemes at all levels. Offer a 401k with a modest match and shove every single one of them in the SS scheme like the rest of us plebes.

L

[Eagles6]

Yep

[Rome2000]

INCLUDE CONGRESS AND THE WASHINGTONIANS!!!

Any candidate for POTUS that runs on THAT will make the opposition to Trump look like small potatoes.

[abb]

Unless and until public employee unions are outlawed, we will continue to have this problem.

[Popman]

Or they could pay them 20 cents on a dollar and be done with it...

Baby pacifiers are free with your first check...

[The Antiyuppie]

Some of the comments mention that KY requires a Masters to hold certification, hence more pay should be expected. So, i wonder why KY isn’t raising an army of geniuses. The results speak for themselves.

Meanwhile, every time I flush a dump here I am being charged a school tax (this is literally true).

How this problem is solved will strongly influence where I retire.

[LowNslow]

These dirty politicians are at it again messing with KRS. What groups/associations kept funding these dirty politicians year after year when they failed to fully fund KRS or rob funds for other purposes?

What groups/associations kept asking for more money and voter support to keep those politicians with false promises in office year after year.

Who were those voters with eyes wide closed that gave the money and votes to groups/associations and politicians year after year with the same result.

I am sure it could not have been my fellow registered Democrats, I am sure we would not have done this to our selves.

[Lurker]

“Or they could pay them 20 cents on a dollar and be done with it...“

I believe something like that happened in Stockton CA. I don’t think pacifiers were part of the deal tho.

L

[drdirt333]

The Frankfort Fools tell us they are 35 billion light. Its really 68 billion as the asset return assumptions are all inflated

The democrats spent us into oblivion.

[sphinx]

Unless and until public employee unions are outlawed, we will continue to have this problem.

I agree with eliminating public employee unions, but that isn't necessary to fix the pension problem. The key is to establish the principle that all pensions be fully funded on a defined benefit basis.

ERISA required that private sector pensions be fully funded; this was done in the 1970's, one of the few Jimmy Carter initiatives for which we can be grateful. This was controversial at the time since it did indeed impose an expensive mandate on private employers. There may have been smarter ways to phase it in. But in retrospect, the underlying principle was sound. The shame is that the same discipline was not imposed on public sector pensions, including Social Security.

ERISA did not require defined contribution plans, but it powerfully incentivized them. The attraction of defined benefit plans to sponsors is that promises can be made today with the burden of payment kicked down the road. The unions historically went along with this on the assumption that these unfunded promises would eventually be made good. But we're now reaching the end of the road. If the Democrats regain control in 2018 and 2020, I expect that we'll see a federal bailout of state and local pension liabilities. Add that to the list of reasons to keep Congress Republican.

[DoughtyOne]

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[Chode]

working for ANY form of gooberment is NOT supposed to be like winning the lottery!

[browniexyz]

I cannot get over the entitlement and know-it-all mentality of the teachers.

In the private sector, we all know it takes time for pension entitlement to vest, and even then it might be tied to performance, etc etc.

Why should the taxpayer guarantee more to a public employee than the taxpayer gets from his or her employer?