Tuesday, April 16, 2013

Kentucky pensions underwater

Better late than never?

Kentucky's pension reforms seen as positive for the state | Reuters: "Under the new law, Kentucky will be required to fully fund its ARC by fiscal 2015, at a cost of about $100 million a year that is to be covered by changes to the state's personal income tax. Kentucky will also put new hires into retirement plans similar to those provided in the private sector and essentially eliminate cost-of-living adjustments for retirees. "We believe acceleration to the full ARC will have a positive impact on the long-term trajectory of the state's pension liability," Fitch said. "However, the impact of the acceleration will be muted due to the significant underfunding level." Last week another rating agency, Moody's Investors Service, noted Kentucky has one of the worst funded pension systems in the country, with the sixth highest unfunded pension liability of any state. The Kentucky Employees Retirement System only has enough assets to cover 30.2 percent of its liabilities. . . ."


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