Governor Ernie Fletcher’s Communications Office
Governor Fletcher Recommends $50 Million for State Retirement Systems
Establishes Blue Ribbon Commission to study long-term solutions
FRANKFORT, Ky. – Governor Ernie Fletcher today announced that he is recommending to the General Assembly that at least $50 million of the projected General Fund additional revenues for the current biennium be dedicated to the Kentucky Employees Retirement Systems (KERS) and the Kentucky Teachers’ Retirement System (KTRS). Recent actuarial reports project a significant increase in the unfunded actuarial accrued liability of the two pension and health insurance plans.
“The state made a promise to these employees and teachers and we must keep that promise,” Governor Fletcher said. “As I traveled around the commonwealth gathering the thoughts of our citizens, honoring our commitments to the public employee pension systems was a high priority in almost every case.”
Governor Fletcher was joined at today’s announcement by Gary Harbin, executive secretary of the KTRS; Finance Secretary John Farris; Personnel Secretary Brian Crall; and State Budget Director Brad Cowgill.
An executive order establishing a Blue Ribbon Commission on Public Employees Retirement Systems will also be signed today by Governor Fletcher. The 23-member commission will study methods to address the current unfunded liabilities so as to fulfill the obligations to current retirees and employees, and ensure an appropriate level of benefits for future employees.
The commission’s membership will be comprised of the Secretaries of the Finance and Administration and Personnel Cabinets; the State Budget Director; the Commissioner of the Kentucky State Police; the Executive Director of the Kentucky Employees Deferred Compensation Authority, the Executive Director of the KERS; the Executive Secretary of the KTRS; the Chairpersons of the Appropriations and Revenue Committees of the General Assembly; representatives from the Kentucky League of Cities, the Kentucky Association of Counties, the Kentucky Education Association, and the Kentucky Association of State Employees; and citizen members with expertise in investments, fiduciary matters and business administration. The commission will make its report to the governor no later than December 1, 2007.
“By signing this executive order, I am sending a message to state employees, teachers and retirees that your government made a commitment to you and that commitment will be honored,” Governor Fletcher said. “We have to focus on how we meet those commitments and responsibly plan for the future.”
Last summer, Governor Fletcher transferred a total of $24 million, $12 million each, into the two public employee pension systems to help reduce their liabilities, a move that has been favorably received by credit rating agencies.
“My charge to this commission is not to propose changes to the benefits enjoyed by current retirees or promised to current employees and teachers,” Governor Fletcher said. “We cannot and will not do that. Period.”