The Louisville Courier-Journal reports that an independent actuary report to KRS trustees showed unfunded pension and insurance liabilities for the state have ballooned to more than $12 billion this fiscal year and that drastic increases in the state’s contribution rates are needed to fully fund retirement obligations in fiscal year 2012-13, which begins July 1.
The actuary recommended that state contributions increase from 19.82% payroll this year to 44.55% next year for employees in non-hazardous positions — the state’s largest beneficiary pool, which fell from being 30% funded in 2010 to 27% funded this year. Other recommendations include raising the contribution for employees on hazardous duty from 28.98% to 35.89% and increasing the amount for state police from 52.13% to 103.41%.
According to the news report, board trustees voted unanimously to forward the recommendations on to the legislature, but legislators are expected to fund only a portion of those recommendations based on a 2008 reform known as House Bill 1 that seeks to ease the pension shortfall with gradual increases over the next 14 years.Under that schedule, the state would only pay 53% of the recommendations in 2012, and by 2025, agencies must begin to pay the recommended contribution amount in full.
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