Pension systems say $1.3 billion more needed in next budget
At a meeting of the Public Pension Oversight Board (PPOB) Monday, Kentucky’s two largest public pension systems said they will collectively need more than a billion dollars in addition to their normal funding requests over the next two years.
As legislative leaders and the governor continue to prepare for a special session to tackle pension reforms, the Kentucky Retirement System (KRS) and Kentucky Teachers Retirement (KTRS) representatives explained that they will need even more funding in the next biennial budget in order to keep up moving forward.
KTRS Deputy Executive Director Beau Barnes said the teachers’ retirement system will need $760 million in 2019, a $115 million increase from the allocation given to the system in 2017, and $741 million total in 2020, an increase of $95 million from 2018. Based on those figures, the system will need an additional $200 million over the next two years.
KRS Executive Director David Eager explained that the system will need $2.6 billion over the next two years, an increase of $1.1 billion over the last budget period.
The 2018 General Assembly will also face other budget challenges including finding additional funds for growing costs in Medicaid and corrections. The state is also facing a $350 million budget shortfall in the current budget year due to declining tax revenues.