The head of Kentucky’s retirement system for public sector workers says funding continues to be a challenge.
Pension funds have decreased as retirements rise and payroll contributions fall. David Eager, executive director of Kentucky Retirement Systems, addressed the Public Pension Oversight Board on Monday.
He said the Kentucky Employees Retirement System (KERS) non-hazardous plan is now less than 13 percent funded, making it the worst-funded of all the state’s pension plans.
"If we were to receive no contribution and no investment return, it would be insolvent in two years," Eager stated. "That's not going to happen. We're going to get contributions and, hopefully, investment returns, but we're in a very fragile state."
On a brighter note, the County Employees Retirement System funding level dipped only slightly this year. The Kentucky Teachers’ Retirement System showed improvement with a funding level that increased by just over one percent.
The unfunded liability for Kentucky’s public pension plans overall has grown this year to more than $37 billion. That’s an increase of $430 million over previous levels.
The update given to state lawmakers this week didn’t reflect changes made under Senate Bill 151 that passed the General Assembly this year. Implementation of the pension reform law is pending a ruling from the Kentucky Supreme Court.