The Truth About The Lack of Pension Funding
Earlier this week, Senate President Stivers held a press conference tried to absolve the legislature of responsibility for not properly funding the pension system. Here is the other side of the story.
Many of you have asked about the validity of Senate President Stivers negative comments about TRS this week. Here is the truth:
- The 2013 memo he refers uses a short period that includes the great recession. The market has rebounded since this memo was issued, and TRS assets are at record levels.
- KRS 161.550 is a two-pronged funding approach. The first uses a percentage of pay. The last paragraph of the statute requires that, if the percentage contribution doesn’t cover what is needed (the actuarially required contribution), that the state, in the next budget, is to fund the difference in addition to the salary-based contribution. The second part is what the state failed to fund for about a decade.
- Every Budget request from TRS requested the full ARC. Budget request are sent to the legislature as well as the governor. The legislature receives copies of the annual actuarial valuation that reports what the required contribution is.
- TRS has sent letters to the governor and legislature requesting full funding and communicating funding needs.
- Because of the second part of the funding law, the legislature used the word “notwithstanding” to set aside the second part of the law, which allowed the underfunding.
KET’s Kentucky Tonight Program: Public Pensions Monday night, Oct 30 at 8:00 PM (ET)
Renee Shaw and her guests discuss public employee pensions. Scheduled guests:Stephanie Winkler, KEA President; Jason Bailey, Director of Kentucky Center for Economic Policy; Dave Adkisson, Executive Director of Kentucky Chamber of Commerce; Dr. William Smith, Bluegrass Institute for Public Policy.
This is must see TV