Kentucky lawmakers said Monday the state’s public pension funds need billions of dollars more to stay solvent and recipients and taxpayers will share the pain.
A legislative task force meeting in Frankfort heard reform proposals from the Pew Center on the States and the Laura and John Arnold Foundation Monday, reports the Lexington Herald-Leader
Lawmakers hope to pass a pension bill in 2013.
The state is facing a $12.5 billion pension shortfall for state and local government workers who will draw benefits from the Kentucky Retirement Systems, plus a smaller system for judges and legislators. The shortfall doesn’t include promised health benefits for retirees or a third pension system for teachers.
The experts said the state can close the gap by putting more money in, making workers contribute more, provide lower retirement benefits, tax retirement income, or issue a $780 million state bond.
“If Kentucky continues to delay, it could become an unmanageable crisis,” the Pew Center report said. “This task force has the chance to make a real, lasting improvement in Kentucky's fiscal health and put the commonwealth on a credible path towards closing its funding gap."
Several lawmakers said they don’t want to change retirement benefits or ask them to pay more, and Democratic Rep. Brent Yonts said asking employees for concessions “could become violent.”
But Sen. Damon Thayer, co-chairman of the task force, said many taxpayers are struggling with their own financial problems and its unreasonable to ask them to dig deep to finance pensions better than the ones they’ll get themselves.
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