The Public Pensions Working Group, formed by the Kentucky General Assembly to review and analyze the state’s public pension systems, met for the first time yesterday at the Capitol Annex. The 14-member legislative panel is co-chaired by Sen. Wil Schroder, R-Wilder, and Rep. Jerry Miller, R-Louisville.
Legislative Research Commission (LRC) staff made presentations to the group at Tuesday’s meeting. Information included an overview of the public pension system’s structure, benefits, assets, membership and funding status as well as a review of past studies and working groups, reform measures taken, an explanation of the 2018 actuarial data and long-term trends. You can access slides from that presentation here.
LRC staffer Brad Gross told legislators that the current total unfunded liability (debt obligations that don’t have sufficient funds set aside to pay that debt) for pension and health benefits in the Kentucky Retirement System (KRS) is now $42.7 billion.
In 2018, the overall unfunded liability of the systems improved, decreasing by $1.1 billion. However, those gains were due to positive progress in the health funds, which saw their unfunded liability improve by $1.5 billion. The unfunded liability for the pension funds, on the other hand, grew by $400 million.
The County Employees Retirement System (CERS) makes up 23.1% of the unfunded liability in KRS, equal to $9.86 billion. There are 559,625 members in the Kentucky Retirement System including active, inactive and retired members, while CERS has 242,185 members, or 43.3% of the total KRS membership.
Image from the Legislative Research Commission presentation to the Public Pensions Working Group, Jan. 15, 2019
In addition to County Fiscal Courts and local elected officials like County Attorneys, County Clerks, Sheriffs and Jailers, CERS membership also includes cities, airport boards, ambulance services, Area Development Districts, boards of education, special districts and boards, utility boards, community action agencies, fire departments, health departments, sanitation districts, tourist commissions and others.
There were 11,133 employees working for County Fiscal Courts, or 11.3% of the nearly 95,000 employees working for participating employers in CERS, as of June 30, 2018.
The working group is charged with making recommendations for General Assembly action by Feb. 15, although the group’s co-chairs can request an extension until March 1, if needed. If even more time is needed to gather information before making recommendations, the co-chairs can submit an additional request for an extension to Dec. 1.
We strongly encourage you to monitor the progress and findings of this group. They plan to meet every Tuesday and Thursday through February and as needed once the General Assembly is back in session beginning Feb. 5th.
A new webpage has been set up to provide information about the group’s members and staff, as well as access to meeting minutes and materials.