The bonds, if approved, would be repaid over the next two decades, in which the state would pay $60 million each year.
In addition to bailing the pension system out of debt, the proposal passed by the Senate would change pension benefits for future employees, but would have no affect on the benefits of current retirees and employees. State employees are now allowed to retire with full benefits after 27 years with no age limit, but under the new measure, employees would have to be at least 55 years old and work an extra five years before they could retire with full benefits.
The retirement system for state employees currently has about $12 billion in unfunded liabilities over the next 30 years, while the plan for county and municipal employees is facing about $7 billion in unfunded liabilities.
Kentucky Governor Ernie Fletcher asked lawmakers in February to funnel $50 million into the systems to prevent a deficit that could lead to reduced benefits (See KY Governor Proposes $50M Boost to Public Retirement Systems ). The state put $24 million into the two pension systems last year, with $12 million going into each.