FRANKFORT, Ky. (March 20, 2014) – In a letter to members of the Kentucky General Assembly, the Kentucky Chamber expressed concern about the funding levels for the Kentucky Teachers’ Retirement System (KTRS) in the current budget proposal and urged legislators to undertake an evidence-based review of the system to chart a sustainable path forward.
In the letter, the Kentucky Chamber President and CEO Dave Adkisson praised the General Assembly for the corrective actions taken in 2013 with passage of Senate Bill 2 and the current funding levels for the state system; however, it warned the current proposed budget addresses one pension funding challenge, while allowing another to worsen. Adkisson described the current funding levels for KTRS as woefully inadequate and warned that allowing the underfunding to persist would exacerbate the problem, making it more difficult to address in the future. (Click here to download a PDF of the letter).
The proposed funding levels in the current budget proposal represent only a fraction of the funding needed to meet the KTRS ARC. According to system actuaries, the current budget would fall $873.8 million short over the biennium. In order to fully fund the ARC, the General Assembly would need to appropriate an additional $386.4 million in FY 2015 and $487.4 million in FY 2016.
Adkisson urged legislators to “take action to find a fiscally sustainable path to fully funding all of the state’s pension systems. Our educators, public employees and taxpayers deserve no less.”
Recognizing the difficulties in prioritizing the budget, the Chamber urged a bipartisan, evidence-based review similar to the pension task force of 2012 that led to the 2013 reforms. Adkisson strongly urged “the General Assembly to undertake a bipartisan review of the Kentucky Teachers’ Retirement System during the interim to recommend a sustainable path forward to ensure financial stability.”