US - Kentucky Retirement System (KRS) executive director William Hanes has warned the system is facing a US$377m shortfall over the next two years - despite receiving an additional US$100m funding for the same period.
The KRS administers the Kentucky Employees Retirement System (KERS), County Employees Retirement System (CERS) and State Police Retirement System (SPRS), and Hanes warned the shortfall would continue to increase.
“Based upon the Systems’ projections, the two year budget reduction will result in a shortfall of more than $377m - the largest on record,” he said.
“The cumulative effect of all reductions in today’s dollars amounts to more than $774m in lost contributions and investment opportunities.”
Hanes added that reductions to the KERS and SPRS employer contribution rates would have occurred in nine of the last 15 fiscal years and for the sixth year in a row, when the 2006-2008 budget biennium was complete.
During the budget process earlier in the year, employer contribution rates for KERS and SPRS were increased, meaning total funding for the biennium was increased by an estimated $100.9m.
But Hanes described the increase as “modest”, and said the rates were still short of the amount recommended by the systems and its consulting actuary.
“There is still work to do in raising awareness of the issue and a need for each of [KRS members] to continue to contact the Governor’s office and your local legislators to express your concerns,” said Hanes.
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