Kentucky’s state pension systems are slated to have to pay out more than $17 billion that the state doesn’t have.
That’s according to William Thielen, who is director of the Kentucky Retirement Systems. Thielen testified before lawmakers in Frankfort Monday. He says the state’s various pension funds have only a fraction of what they need to pay all potential retirees.
Thielen says if lawmakers make good on a promise to fund the pensions with the recommend amount, called the ARC, it’ll take a few years before the unfunded liability starts to drop.
“It’ll bottom out around 2018 or ’19, and then start increasing,” Thielen says. “But, again, that depends on the full ARC being paid and for us meeting all of our assumptions, and most importantly our investment assumptions.”
Jim Carroll is a state retiree and founder of a pension advocacy group Kentucky Government Retirees. He says the state should consider expanding gambling and putting money from an Internet sales tax toward the pensions to meet the debt.
“If the federal government passes a bill that requires companies to assess taxes when you buy something on the Internet, then Kentucky’s share would go to the KRS. And that, I believe I just heard him say, would be $200-and-some-odd million,” Carroll says.
Gov. Steve Beshear has appropriated about $200 million for KRS over the next two years.