FRANKFORT, Ky. (WKYT) - Several reports have shown Kentucky has one of the worst funded pension systems in the nation, something Governor Matt Bevin and top legislative leaders say they are committed to solving, but the big question of how to do that remains.
Governor Bevin addressed the pension issues on Monday night during an hour-long question and answer session on Facebook. His speech came just hours after consultation firm, PFM, gave its recommendations on how to get Kentucky's pension system out of a billion dollar hole.
Daniel Desrochers is covering the state's pension crisis for the Lexington Herald-Leader. He says the consulting firm's suggestions spell out how severe the problem is in Kentucky. Among the recommendations are eliminating 16 years of cost-of-living raises for some retirees, raising the retirement age for first responders to 60, and moving teachers to a 401k style plan. While not final, the possibility of those recommendations becoming a reality has created a discussion among people in many fields of retiring early.
"Apparently there are a lot of teachers in the position to retire tomorrow," Desrochers said. "If there is a mass exodus of teachers, that could cause a big problem for the state."
"There's a sense in which a promise was made to them and breaking that promise is not a pleasant thing to do," said Dr. Chris Bollinger who is a professor of economics at the University of Kentucky.
Bollinger and Desrochers agree that whatever lawmakers do will not be a quick fix, and the decision does potentially have an impact on every Kentuckian.
"There's a problem here, and it needs to be solved. We can discuss the best ways to solve that, but there's going to be costs to people no matter what. Whether it's we raise taxes, cut other programs, or cut benefits to pensioners .... people are going to be unhappy."