US - Kentucky Retirement System (KRS) executive director William Hanes has called on members to push for an increase in the employer contribution rates to the system - or risk a nearly US$400m shortfall.
Hanes requested members to contact local legislators and those in key leadership positions before the House and Senate adopted their versions of the budget.
“Ask them to honour the contractual commitments they have made to you in state law before appropriating funds for new projects and programmes. Ask them to commit towards working with the Retirement Systems in developing a long term strategic plan to deal with the funding problems facing your retirement plans.”
According to Hanes, the current rates budgeted by the Governor on January 17 would cause a shortfall of more than US$393m over the next two years, He also said the budget would produce a shortfall larger than all previous budget reductions combined and would bring the cumulative shortfall to date to more than $760m.
“The Governor’s budget proposal does not provide appropriations or a statutory directive to provide for the dependent subsidy.”
Rather, the budget proposal allowed the KRS board of trustees the option to pay the dependent subsidy out of the relatively small increase in the budgeted employer contribution rate, he said.
“Given the current financial condition of the Systems, paying for additional benefits beyond what has already been promised to you is simply not feasible.”
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