Rep. James Kay wants lawmakers to own up to pension problems by living with it themselves
Morgan Watkins, The Courier-Journal Morgan Watkins
Rep. James Kay wants Kentucky legislators to own up to years of underfunding the state's retirement systems.
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Courier Journal
FRANKFORT, Ky. — As Kentucky lawmakers prepare to tackle pension reform, they're also considering the impact the commonwealth's struggling retirement systems will have on the next budget and whether legislators' pensions should be handled differently than those of other public employees.

During a Monday meeting of the legislature's Public Pension Oversight Board, state Rep. James Kay, D-Versailles, emphasized the importance of seeing legislators own up to their responsibility after years of underfunding the state's retirement systems.

Of the state's retirement systems, the Kentucky Teachers Retirement System and Kentucky Retirement Systems are the biggest. The pension plan for legislators isn't administered by either of them, and it isn't nearly as underfunded as the plans managed by KRS or the teachers' system.

Kay said Monday that he supports ending the separation between legislators' pensions and those of other government workers.

A local citizen who spoke during the meeting agreed with Kay, telling the pension oversight board, "Treat yourselves the way you treat us. That's all I ask."

Gov. Matt Bevin plans to hold a special session of the legislature this fall that will be devoted to the pension crisis. The Bevin administration’s pension consultant, PFM Group, has recommended shifting state employees and future public-school teachers to a 401(k)-style retirement plan.

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Republican state Sen. Joe Bowen of Owensboro, who co-chairs the pension oversight board, indicated Monday that legislators' pensions may be affected by some of the forthcoming reforms, although lawmakers haven’t yet determined what those reforms will be.

"We need to be the first one in line for any changes," he said.

Kentucky's pension crisis will play a significant role not only during Bevin's anticipated special session but also during next year's regular session, when legislators must approve a budget for the next two fiscal years.

Representatives for the state's retirement systems presented fresh budget estimates for fiscal years 2018-19 and 2019-20 to the pension oversight board on Monday. Both KRS and the Teachers' Retirement System indicated that they'll each need significant increases for each of those fiscal years to meet their obligations.

KRS alone, which oversees pension plans for both local and state government workers, estimates that it will need to request approximately $2.4 billion in funding contributions from state and local governments for fiscal year 2018-2019, according to KRS interim executive director David Eager.

That's an increase of about $956.8 million compared to the current fiscal year, Eager said.

The KRS budget request for fiscal year 2019-2020 is likely to total around $2.4 billion as well.

Contact reporter Morgan Watkins at 502-875-5136 or mwatkins@courier-journal.com.