At the August joint board meeting of the Federal Reserve Bank of St. Louis, Kentucky was referred to as the “Greece of the United States.”
That painful description was brought to light by Kentucky Chamber of Commerce President David Adkisson when he spoke to the Owensboro Noon Rotary Club recently.
In his presentation, Adkisson, former mayor of Owensboro, brought a new urgency to pension reform by calling it the General Assembly’s No. 1 priority in its upcoming session.
Adkisson said it’s the state’s $30 billion-plus underfunded pension liability that has caused the concern with the Federal Reserve board.
Among the eight states — Kentucky, Missouri, Illinois, Arkansas, Mississippi, Tennessee, California, Indiana — cited in the Federal Reserve’s report, Kentucky’s 54 percent was the second lowest to Illinois’ 45 percent when it came to adequately funding public sector pensions.
For nearly 10 years, lawmakers in this state have refused to address the problem, which has resulted in this massive pension fund liability that will only become harder to overcome if allowed to continue at this alarming rate.
However, the state has established the Public Pensions Task Force, and its job is to come up with viable recommendations to reduce the shortfall.
At stake here are the future retirement plans of the thousands of state government workers, teachers and local government employees.
An attempt was made in 2011 with House Bill 480 to create a system where new public hires would no longer receive defined retirement benefits. Instead, employees would contribute to a system similar to 401(k) programs in the private sector, and those contributions would be matched by state government.
According to Adkisson, the Kentucky Chamber of Commerce supports a defined contribution plan for new public employees.
But he acknowledged that pension reform is one of those “tough issues” that has to be hashed out before it falls into the lap of the General Assembly in January.
The Public Pensions Task Force has a Dec. 7 deadline to present its recommendations regarding pension reform.
“It’s not a Democrat-Republican issue. It’s simply the math,” Adkisson said.
The General Assembly should listen hard to Adkisson.
— Owensboro Messenger-Inquirer