FRANKFORT — Kentucky state government could face increased pension costs if a court ruling is allowed to stand, state lawmakers were told on Wednesday.

The ruling, which is pending appeal, said quasi-governmental agencies such as Seven Counties Services can abstain from paying into the ailing state pension system.

If the appeals court agrees with the ruling, the state would have to cover $2.5 billion in unpaid pension obligations, Kentucky Retirement Systems executive director Bill Thielen said.

“The actuaries have determined it would increase the contribution rate over a 20 year period, it would ratchet up a little bit each year over 20 years about 6.5 percent, which would amount to about $2.4 billion of additional moneys over the 20 year period that would have to be picked up by the remaining employers in the system,” Thielen said.

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Seven Counties filed for bankruptcy last year, and a federal judge ruled in May that the organization does not have to pay into the retirement system, which has more than $17 billion in unfunded pension liability.

Thielen said KRS will file a motion to determine jurisdiction for the appeal by the end of this week.

Lawmakers said they will try to have a legislative remedy ready for next year’s General Assembly session.