Kentucky look to prevent looming pension crisis
Lexington, KENTUCKY: A legislative task force assigned with making recommendations concerning the state's public pension system has made some harsh suggestions, including removing cost of living increases for retirees. The legislature must also pay more into the system in coming years and trim benefits if it is to solve a looming gap in the Kentucky Retirement System, according to the Kentucky Public Pensions Task Force. While the General Assembly is not yet in session, this panel voted on a package of reforms that will be introduced as bills when legislators resume work in 2013.
The unfunded liability now exceeds $30 billion, and the panel argued that the state must begin offering new government hires 401(k)-style packages, rather than traditional pension plans, if it is to make the system sustainable.
A member of the panel, Senator Dorsey Ridley (D), stressed the importance of making reforms, and said "This issue is Kentucky's fiscal cliff. I think we've made a bold statement to address this issue, and I really think it's time we move forward so that we can assure current retirees we won't have some future date out there where we have to tell them we have to cut your pensions to make ends meet."