After much debate over the funding issues facing the Kentucky Teachers’ Retirement System (KTRS) during the 2015 session, Gov. Steve Beshear has taken executive action to form a 23-member panel to study the system and suggest changes to strengthen the retirement plan.
Kentucky Chamber of Commerce President and CEO Dave Adkisson is among those appointed to the work group made up of policy, government and education leaders. The Chamber has previously called for similar action to be taken to look into the system.
In March 2014, the Chamber called for the creation of an interim legislative study group to conduct a thorough review of KTRS funding issues, using independent outside experts, and recommend reasonable strategies to address the funding gap and unfunded liabilities.
When legislation was proposed to bond $3.3 billion to shore up the plan during the last session, the Chamber expressed concerns about moving forward with such a decision without public debate on the idea as well as a deeper look into the system’s practices.
“The Kentucky Chamber believes the pension issue is the most pressing challenge to the financial stability of the Commonwealth of Kentucky and takes these challenges very seriously. My hope is that this group engages independent experts and takes real steps to address the persistent problems within the retirement system,” Adkisson said.
The group created by Beshear will be led by former state senator and former State Board of Education Chairman David Karem and meet over the coming months to examine KTRS and craft recommendations to shore up the pension plan and ensure future financial stability of the system. The recommendations are due on or before December 1, 2015.
In a statement about the executive order, Beshear said while other groups have looked into the system before, it has become crucial for action to be taken as the system faces a $14 billion unfunded liability and a 53.6 percent funding status.
“It is critical that we explore the options and develop recommendations to aid the 2016 General Assembly as action needs to be taken next spring to address this crisis,” Beshear said.
Also in the release, Beshear noted a recent white paper issued by an Atlanta-based investment firm, the details of which were first reported on by Insider Louisville, cautioning investors to “remain highly selective when purchasing bonds issued in the state” because of the state’s woefully underfunded pension plans.
Beshear stated that the warnings are “further evidence that this fiscal crisis has financial implications beyond this administration.”
The full list of members to the working group appointed by Beshear includes:
• David Karem, former state senator and former chair of the Kentucky Board of Education
• David Adkisson, CEO of the Kentucky Chamber of Commerce
• Mike Armstrong, executive director of the Kentucky School Boards Association
• Jason Bailey, research and policy director for the Mountain Association for Community Economic Development
• Mary Ann Blankenship, executive director of the Kentucky Education Association
• State Budget Director Jane Driskell
• Auditor of Public Accounts Adam Edelen, who shall serve as a nonvoting member
• Amanda Ellis, associate commissioner, Office of Next Generation Learners in the Kentucky Department of Education
• Secretary of the Finance and Administration Cabinet Lori Flanery
• Gary Harbin, executive secretary of the Kentucky Teachers’ Retirement System
• State Treasurer Todd Hollenbach, who is also a board member of Kentucky Teachers’ Retirement System
• Secretary of the Governor’s Executive Cabinet Mary Lassiter
• Secretary of the Personnel Cabinet Timothy Longmeyer
• Roger Marcum, chairman of the Kentucky Board of Education
• Brent McKim, Jefferson County Teachers’ Association president
• Brigitte Blom Ramsey, executive director of the Prichard Committee for Academic Excellence
• Dr. Tom Shelton, executive director of the Kentucky Association of School Superintendents
• Dr. Bob Wagoner, executive director of the Kentucky Retired Teachers Association
• Wayne Young, executive director of the Kentucky Association of School Administrators
• Two members of the Kentucky State Senate designated by the President of the Senate
• Two members of the Kentucky House of Representatives designated by the Speaker of the House.