Lack of pension reforms seen as credit negative by rating agency
After the Supreme Court overturned the state’s pension reforms and a special session ended without a solution, a credit rating agency said the recent events are a credit negative for Kentucky.
On Thursday, Moody’s Investor Services released a report reversing their previous “credit positive” statement after reforms passed during the 2018 session of the General Assembly.
“The reversal is a credit negative for Kentucky, delaying reforms to its severely underfunded pension plans that were set to provide modest savings over the long term,” Moody’s stated.
In the report, Moody’s said Kentucky’s net pension liability is now at nearly $39 billion at the end of fiscal 2017 (June 30, 2017), equal to 332% of the state’s revenues.
“Kentucky’s ability to maintain its improved level of pension contributions, especially for TRS and KERS-NH, remains a key credit consideration.”