FRANKFORT, Ky. (AP) - A proposal to reform the pension system for state and local government retirees in Kentucky has received an initial OK from Frankfort lawmakers.
The Senate State and Local Government Committee passed legislation Wednesday that would create a 401(k)-like hybrid plan for new employees. It also would eliminate cost-of-living increases for retirees already drawing benefits.
Those provisions were recommended by a legislative task force that reviewed the financially troubled pension system, which has a $33 billion unfunded liability.
The legislation also calls for the state to begin paying its full contribution beginning next fiscal year. That means lawmakers would have to find about $250 million a year in additional funds for the pension system.
The measure now goes to the full Senate for consideration.
The legislation is Senate Bill 2.
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