In what may be an unprecedented move, Kentucky Governor Matt Bevin took to YouTube this week to ensure the state’s public employees that he and lawmakers will do everything in their power to save Kentucky’s failing pension system (you can view the video below).
“The pension is in trouble in Kentucky,” he said of the $37 billion debt-ridden system. “This is a real issue that has to be addressed.” Bevin went on to say that without reform, the system faces insolvency and retiree benefit checks will stop coming in as little as the next three to six years.
Bevin ensured public workers that there is a unified agreement among lawmakers to save the system and despite “all the noise, all the static, all the hysteria and some of the scare tactics,” from reform opponents, “We have a legal and a moral obligation to those of you who are retired to fulfill the promises that have been made to you." Bevin has said he will call a special session with legislators later this year to address the crisis.
As with many of the nation’s underfunded pension systems, there’s a handful of reasons for Kentucky’s massive pension shortfall, including inadequate funding contributions and poor investment returns.
Moody’s this week downgraded the state’s credit rating to Aa3, claiming Kentucky “has one of the heaviest unfunded pension burden of all states,” and “the ability to stop the decline in pension funding levels will be crucial to its credit profile.”