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Pension Funds

New Kentucky public pension working group convenes

A newly formed public pensions working group met Tuesday to begin tackling the funding issues plaguing Kentucky's pension system through a bipartisan effort.

The 14-member legislative panel is co-chaired by state Sen. Wil Schroder and state Rep. Jerry T. Miller, both Republicans, and will set out to "conduct a review of the systems' structure, costs, benefits and funding," a new webpage for the group on the Kentucky Legislature website states. Ten Republicans and four Democrats are in the working group, which consists of seven members each from the House and Senate, according to the website.

The move comes after the Kentucky Supreme Court on Dec. 13 struck down a pension reform bill, SB 151, that aimed to overhaul pension benefits in the state retirement system and had been signed into law in April by Gov. Matt Bevin. Later in December, the Legislature decided to take no action on two pension reform bills introduced in the House by Mr. Miller just before the holidays.

SB 151 included provisions that enrolled new teachers into a cash balance plan instead of the existing defined benefit plan overseen by the $18.1 billion Kentucky Teachers' Retirement System. The Kentucky Supreme Court ruled the law was unconstitutional on a procedural issue, but did not take a stance on the substance of SB 151, Pensions & Investments previously reported.

On Tuesday, the working group set out to discuss pension and retiree health benefits offered under Kentucky's retirement plans and provide a nearly 20-year overview of their funding status and challenges, Mr. Miller said in a phone interview, adding he didn't attend the meeting but was aware of the agenda.

In October 2017, Mr. Bevin's office listed total unfunded liabilities for the $17.4 billion Kentucky Retirement System, KTRS and the $327 million Kentucky Judicial Form Retirement System, at $64 billion. All of the funds are in Frankfort.

The aim of the working group's first meeting was to "give a basic history for some of the members of the committee," Mr. Miller said. "Three members of the committee were freshmen, so they don't know a lot of detailed information. … It was to bring everyone up to speed and educated on the last 20 years of history."

The working group plans to bring recommendations before the General Assembly as soon as next month, Mr. Miller said.

"If we arrive at a recommendation for which we can get a majority vote by the committee, it will result in recommendation for the bill. House and Senate leadership established this working group in an effort to develop an open and hopefully bipartisan recommendation that we can take forward to the full body," he said.