One-on-One: Pension system head talks funding woes and future of benefits in Kentucky
The Kentucky Retirement System (KRS) is seen as one of the worst-funded pension systems in the nation, with one of their plans sitting at only 15 percent funded.
Funding issues faced by the pension system put KRS at the center of a very public conversation as it remains woefully underfunded, causing concern from not only state government workers and retirees, but also the taxpayers as the state discusses how to pay for the pension crisis.
The interim executive director of the system, David Eager, sat down with The Bottom Line to discuss the current state of the pension system and its future as funding continues to be a major issue.
Eager, who was appointed to the KRS Board by Gov. Matt Bevin earlier this year before being chosen by the board to serve in the interim role, discusses the possible changes that the pension system could see, if the new landscape in Frankfort with full Republican control will impact the way pension problems are handled, his opinion on if he believes the inviable contract will see a challenge, and much more in the full interview below:
In a follow-up to the interview, Eager stated the following:
My first day as the Interim Executive Director I attended a meeting at the legislature. I was asked: “Do you have a plan (to improve things at KRS)?” I answered “No, not that I’m aware of.”
I was then told “You need a plan.” I said “I completely agree.” So I began to gather plans from other state retirement systems. I found the following in the plan for New Jersey’s retirement system:
The need for urgency in adopting a solution cannot be overstressed. The already narrow window for a reasonable solution is closing fast. Only decisive action now can preserve a solid foundation of public employee benefits before the ever-growing hold the State has dug itself into becomes too deep for the State to dig itself out of without crushing tax increases and deep cuts to employee benefits and public services. The citizens of our great State—public and private employees, employers, State and local officials, voters and taxpayers alike—need to join together to make this solution possible. Let’s secure the benefits for public employees and the financial future of the State of New Jersey.
This could equally have been written for Kentucky.