Kentucky’s massive pension debt has the Kentucky Chamber of Commerce pushing for a comprehensive audit of the entire state retirement system.
"The fact that our state has not put aside enough money to cover all the promises we've made to state workers and retirees, that's a huge issue hanging over Frankfort," says chamber CEO Dave Adkisson.
Adkisson is calling on the State Auditor to review a number of issues including system’s investment policies, the cost of outside investment advisors, and the state’s reliance on only one actuarial firm in forming funding recommendations for pensions.
"The legislature bases a lot of their decisions, not only about pension costs but also about everything else they do with their budget, on one set of assumptions from one actuarial firm. We feel like there need to be other sets of eyes on that," he says.
Kentucky’s largest retirement plan for non-hazardous state workers regularly ranks as one of the worst funded in the country. And the state has already had its bond rating downgraded three times. With unfunded liabilities creeping over $17 billion, the chamber is pressing State Auditor Adam Edelen to employ outside analysts.
"Yes, there would be some cost to bringing them in to look at this," Adkisson admits. "But that cost is miniscule compared to hundreds of millions of dollars at stake."
In a statement, Edelen said he shares the chamber’s concerns, adding, however, that "broad, bipartisan support and additional resources for our office to conduct the highly-technical work."
The auditor's office says no decision has been made.
