FRANKFORT, Ky. (AP/WTVQ) – Kentucky lawmakers passed a bill that would let up to 118 quasi-governmental agencies leave the state’s struggling retirement system.
Legislative leaders say the plan will save many of those agencies from bankruptcies, since they can’t afford to pay ballooning pension payments. The agencies include local health departments, domestic violence shelters, rape crisis centers and some public universities.
But the plan would also let the agencies leave without paying what they owe, which could cost the pension system up to $799 million over the next few decades. The system is already one of the worst-funded retirement plans in the country.
Republican Sen. Chris McDaniel called the plan the best of bad options.
The Kentucky Government Retirees, an incorporated advocacy group that represents 15,000 Kentucky Retirement Systems retirees and active employees, issued the following statement after the measure passed:
“House Bill 358 establishes a disastrous funding policy for the nation’s most fragile state pension plan. It will drive up unfunded liabilities and increase employer contributions for the remaining employers in the system. As a consequence of this ill-considered action, we have no confidence that legislators will be able to fully fund pensions in the 2020 session and beyond.”