The commonwealth's already-limping pension system has slipped further into the red. Thursday, the Kentucky Retirement System’s official debt grew by several billion dollars.
The KRS board downgraded its assumptions about investment returns, state government payroll growth, and inflation going forward – bumping the estimated unfunded liability up by roughly $3 to 4 billion.
According to the Lexington Herald-Leader, that means the state’s largest pension fund now has just 13.8 percent of the money required to pay out benefits.
Governor Matt Bevin has been sounding the alarm on pensions since his campaign days. Last week, he warned Kentuckians that this is not a drill.
"Our pension systems are nearly out of money," he told WUKY. "It's important for people to understand. This isn't just like a potential or it's hypothetical. There literally will be no checks going to retirees in a very short number of years, within the lifetime of all those that are working now and many of those that have already retired."
Despite commitments by the General Assembly to pour billions into the funds in the coming years, KRS board chair John Farris says the state’s contribution will need to be an order of magnitude higher in 2018.
For now, Bevin is laying the groundwork for a special session later this year to deal with pension and tax reform.