KY Gov.’s Budget Proposal Includes Pension Audit, Big Funding Increase

Newly elected Kentucky Governor Matt Bevin on Tuesday gave his budget address yesterday, and the speech – along with the accompanying budget – made pensions a top priority.

The proposed budget has the state making its full actuarially required contributions to the state pension systems, along with tens of millions of dollars in extra funding for the systems.

The budget also allocates money for an audit of the pension systems to look for reform possibilities.

More from the Courier-Journal:

With Kentucky facing a $30 billion pension shortfall, Gov. Matt Bevin’s budget proposal includes a substantial funding increase for public retirement plans along with money to audit all of the state’s pension systems for potential reforms next year.

Bevin said that Kentucky must send a message to the world that it is serious about tackling problems in government pensions. He said his budget will direct money to the issue like no administration before.

“We cannot afford to kick it down the road,” he said.

KTRS needs $520 million in additional allocations in the first year of the biennial budget and nearly $513 million more in the second year.

Bevin’s proposal would channel $300 million in additional funds to the system in the first year and $291 million in the second.

Meanwhile, Kentucky Retirement Systems would receive the full contribution – $60 million in the first year, and $70.5 million in the second. On top of that, the budget allocates an additional $44.7 million each year to improve the system’s finances, an approach commonly known as “ARC plus.”

Bevin’s budget also relies on a more conservative investment outlook, which assumes that investments in KERS non-hazardous will grow at 6.75 percent rather than 7.5 percent.

You can watch Bevin’s speech, specifically the part focused on pensions, in the above video.

 

Photo credit: “Ky With HP Background” by Original uploader was HiB2Bornot2B at en.wikipedia – Transferred from en.wikipedia; transfer was stated to be made by User:Vini 175.. Licensed under CC BY-SA 2.5 via Wikimedia Commons

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