Kentucky will pour an additional $1.28 billion into its state retirement systems over the next two fiscal years under a budget bill signed into law by Gov. Matt Bevin.
Mr. Bevin signed the budget bill on Wednesday, a little less than two weeks after it passed the General Assembly. The budget covers the next two fiscal years starting July 1.
The $17 billion Kentucky Teachers' Retirement System, Frankfort, will receive an additional $498.54 million in pension fund contributions in fiscal year 2017 and $474.72 million in fiscal year 2018 under the budget. The $11 billion Kentucky Retirement Systems, Frankfort, will receive an additional $98.19 million and $87.57 million in each of those periods, respectively.
The budget includes a $125 million permanent fund or repository to help fund future pension costs. Mr. Bevin had initially proposed a $500 million permanent fund.
“We are delighted that this budget makes a historic commitment to our ailing pension system and restores fiscal responsibility in state government,” said Mr. Bevin in a news release.
Pension fund officials praised legislators for the additional funding.
“We are pleased that the Kentucky General Assembly appropriated the full actuarially required contribution rate and that additional funds over and above the ARC were provided. These additional funds will help the negative cash flow situation in our Kentucky Employees Retirement System non-hazardous pension plan,” William A. Thielen, executive director at KRS, said in an e-mail.
Beau Barnes, KTRS’ deputy executive director, said in an e-mail: “We are extremely pleased with the funding provided for teachers’ retirements in the budget and very thankful to the governor and General Assembly for making funding of their retirement system a priority.” The budgeted amount for KTRS is just short of its ARC.
Kentucky’s retirement systems face more than $30 billion in unfunded liabilities combined.
KTRS and KRS were 55.3% and 41.4% funded, respectively, as of June 30.
