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Newsmakers

Kentucky Retirees Grow as Special Pension Session Is Pushed Back

Special legislative session may begin in early November.

By Chris Butera

Kentucky’s floundering pension system is experiencing another thorn in its side, as an alarming number of public employees have decided to retire in the midst of preparations for a pension reform plan set to be enacted this fall.

In September and October, Kentucky Retirement Systems (KRS)—a plan that could become insolvent within five years if no action is taken—saw 1,423 workers announce their retirements. Last year, only 1,018 employees retired in the same period.

The Teachers’ Retirement System (TRS) has also received 120 applications for November retirement, up 64% from last year’s 73 November 1 retirees.

This retirement spike comes at a time where Gov. Matt Bevin and lawmakers have struggled to arrange a special legislation session to discuss state pension reform. Originally, the meeting was to take place in October, but according to Kentucky New Era, the session may instead begin in early November. However, the publication reports that some leaders within the legislature’s Republican majority said that a final pension reform framework could be released to the public this week.

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In the meantime, Bevin and legislators have been telling teachers and public employees that there is no need to retire over reform-related concerns, as any reforms passed during the session will not take effect immediately. Bevin and company have assured employees that there will be a window after the special session to retire under the same terms as today.

“I believe, and appreciate, the governor and the legislative leaders’ commitments to giving employees time to make an informed decision,” Brent McKim, president of the Jefferson County Teachers Association, said in an interview with the Kentucky New Era. “But I guess there are some people who are taking what they think is a ‘better safe than sorry’ approach.”

In an August 28 report, financial consulting agency the PFM Group, made recommendations to include in the reform, some of which caused controversy for Bevin and legislative leaders. One such recommendation was to cut past cost-of-living increases from the benefit checks of current retirees, which the governor and lawmakers said would not be part of the final reform.

The PFM Group also recommended raising the retirement age for public employees, as well as swapping traditional pension plans for most current and future state and local government workers to a 401(k)-style plan.

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Home > News > Research > Funded Level for UK Pensions Tops 90% in September
Research

Funded Level for UK Pensions Tops 90% in September

Aggregate deficit declines by £62.4 billion.

By Michael Katz

The aggregate deficit of the nearly 5,800 pension plans in the Pension Protection Fund’s PPF 7800 Index fell £62.4 billion to £158 billion ($209 billion) at the end of September, from a deficit of £220.4 billion at the end of August. During this time, the funding ratio increased to 90.6% from 87.6%, according to the PPF.


As of the end of September, the PPF 7800 had total assets of £1.52 trillion, and total liabilities of £1.68 trillion; there were 4,079 plans in deficit, with 1,715 that were in surplus. At the same time last year, the deficit was £373.5 billion, and the funding ratio was 79.8%. There were 4,261 plans in deficit at the end of August 2017 (73.5%) and 4,792 plans in deficit at the end of September 2016 (82.7%).

The number of plans in surplus rose to 1,715 at the end of September (29.6% of plans) from 1,533 at the end of August (26.5%). There were 1,002 plans in surplus at the end of September 2016 (17.3%)

Total assets decreased by 1.8% over the month, but rose 3.4% from September of 2016. Total liabilities at the end of September decreased 5.1% from the previous month, and 9% over the year.

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The aggregate deficit of all pension plans in deficit at the end of September decreased an estimated £52.6 billion to £240.5 billion from £293.1 billion at the end of August. At the end of September 2016, the aggregate deficit of all pension plans in deficit was £414.2 billion. Meanwhile, the total surplus of plans in surplus increased to £82.5 billion at the end of September, from £72.7 billion at the end of August. At the end of September 2016, the total surplus of all plans in surplus was £40.7 billion.

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