New York – Standard and Poor’s Rating Services has lowered Kentucky’s credit rating to A+, down from AA-.
“The downgrade reflects our view of Kentucky’s substantially underfunded pension liabilities that are the result of chronic underfunding and that we view as placing long-term pressures on the state’s finances,” Standard & Poor’s credit analyst John Sugde said in a press release.
“The Kentucky Retirement System includes various funds, with the two largest substantially underfunded and the reshaving below-average funded levels. Despite pension reform efforts that began in 2008, Kentucky lawmakers have yet to make meaningful progress in reducing its long-term pension liability, especially as it relates to Kentucky Teachers’ Retirement System. Although pension reform was discussed in the 2015 legislative session, the session ended without a resolution on how to address KTRS’ large unfunded liability,” Sudge added.