No 401(k) Retirements In Kentucky Pension Reform
By Mike Perleberg
(Frankfort, Ky.) – The latest plan to reform Kentucky’s ailing pension system won’t shut the system down.
Senate President Robert Stivers yesterday said the reform package does not include an option to force or move current or future state workers to a 401(k)-style retirement system.
Capping benefits and requiring new state workers to switch to a 401(k)-style savings plan was the cornerstone of an earlier proposal endorsed last year by Republican Gov. Matt Bevin.
Stivers said actuarial models showed it’d cost too much money to close down any portion of the KRS and start again with a defined contribution retirement plan.
The bill has not yet been filed, so many aspects of the plan remain unclear.
Kentucky is in the unenviable position of having one of the worst-funded public pension systems in the nation. The system has a deficit of more than $42 billion over the next 30 years – a forecast that has put strains on the state budget in order to meet obligations.