By Jacqueline Pitts, The Bottom Line
Acting House Speaker David Osborne says the pension reform issue was “toxic from the beginning” but he feels the changes made in the 2018 session will stabilize the systems. The legislature can then shift its focus to funding of the systems while tax reforms will need to continue in order to make Kentucky more competitive.
In an interview with The Bottom Line, Osborne called the pension reforms of the 2018 session the most controversial and divisive issue he has seen in the legislature in the 12 years he has been in Frankfort and “the most difficult process I’ve ever been through.”
Osborne said he believes the pension reforms made to the Kentucky Teachers’ Retirement System (KTRS) were thoughtful to both existing and retired employees and kept the promises made to them with their employment.
He also stated he feels many individuals will like the portability that comes with the new form of retirement as they will be able to take any money in their retirement fund with them if they move or switch careers.
Osborne said the $60 billion in unfunded liability has an enormous impact on the commonwealth but it must be paid.
“Certainly, the ultimate challenge to pension reform now though is funding it. We’ve got to make sure that we continue to make that commitment to funding it. If we don’t, then we’ll end up right back in the same place,” Osborne said.
Osborne added the legislature has made a strong commitment to fund the systems which he said began with the additional $1.2 billion put toward the systems in the budget passed in the 2018 session.
“There is no amount of reforms that we can do that will alleviate the underlying issue, which is they’re underfunded,” Osborne stated.
When asked if the reforms passed in 2018 and the new funding model will help the state begin to recover from the pension crisis and no longer require any major changes to the systems, Osborne said he believes the systems have been stabilized and the reforms have put the state on a path toward long-term stability.
“As long as we remain focused. As long as the future legislators remain committed to continuing the practice that we’ve started, and make sure that we put the money that is necessary in there, then we will grow out of this problem,” Osborne said.