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Kentucky General Assembly passes budget to ratchet up pension fund contributions

Kentucky Capitol
Kentucky State Capitol

Kentucky's state retirement systems would see an additional $1.28 billion in pension fund contributions over the next two fiscal years under a budget bill passed by the Kentucky General Assembly.

The bill, which passed Friday, was a compromise between the amounts approved separately by the House and Senate in March. The bill covers the budget for the next two fiscal years starting July 1.

Under the bill, the $17 billion Kentucky Teachers' Retirement System, Frankfort, would receive an additional $498.54 million in fiscal year 2017 and $474.72 million in fiscal year 2018. The $11 billion Kentucky Retirement Systems, Frankfort, would receive an additional $98.19 million and $87.57 million in each of those periods, respectively.

The bill includes a $125 million permanent fund to help shore up the pension funds. Funding would come from a surplus in the state's public employee health insurance fund. Gov. Matt Bevin previously proposed a $500 million permanent fund, a repository that would help fund future pension costs.

KTRS and KRS were 55.3% and 41.4% funded, respectively, as of June 30 and face more than $30 billion in unfunded liabilities combined.

A spokeswoman for Mr. Bevin could not immediately be reached for information on whether the governor intends to sign the bill.