Kentucky governor calls a special session
It's back to work for Kentucky lawmakers starting Monday. The governor has called a special session to address the financially deflated state pension system.
The state is facing a $26 billion deficit in unfunded liability. Without change, lawmakers fear the pension system would eventually collapse.
Governor Steve Beshear says, "Our pensions systems for our teachers, our public employees, our police, our fire, our civil servants they are all at risk right now and we know that."
Kentucky currently has 445,000 retirees. Lawmakers return Monday to address change in the current retirement system, which is in financial ruin. Future state workers are at risk of losing their retirement nest-eggs.
Governor Steve Beshear says, "We owe a financially secure retirement for those folks by doing these reforms, we are going to secure that future for these public employees."
The governor thinks this bill has a good chance of passing because members of both the House and Senate have agreed to its language. The state faces a $26 billion deficit in unfunded liability meaning right now the state would have to write cold checks for the pensions of future retirees.
The governor says this bill makes attempts to prevent the unfunded liability from growing. Under the plan, future state workers would not be able to retire with full benefits until the sum of their age and the number of years worked equals 87 or they reach age 65. The governor claims other changes to how the state invests would create savings.
Beshear says, "The actuaries looking at these forms indicate to me that we will be able to save $500 million a year in terms of growth of the funded liability by having a 1 percent increase in the investment return we have right now."
He says that would create $56 million local governments could use towards need services like police, fire or teachers.
Beshear says, "If we can resolve this issue it will show that the house, senate and governor can come together and work on a very significant issue and resolve it. And I think the people of this state would appreciate that."
The governor is hoping this reform can be a success story since his first attempts to pass a casino bill and a cigarette tax both failed.