BRADENTON, Fla. - Kentucky Gov. Steve Beshear signed a bill strengthening oversight of state's pension systems, including the teacher's retirement plan and its $14 billion in unfunded liabilities.
House Bill 47, signed by Beshear on Friday, broadens the Public Pension Oversight Board's responsibilities to include the Kentucky Teachers' Retirement System as well as the retirement plans for state police and county employees.
The Oversight Board also oversees the Kentucky Employees Retirement System along with pension plans for county employees and state police, reporting to the General Assembly on each plan's benefits, administration, investments, funding, regulations, and legislation.
"I have worked with lawmakers over the last several years to fully honor our commitments to state workers and retirees, address the state's credit rating and improve transparency and legislative oversight of the Kentucky Retirement Systems," said Beshear.
The additional duties imposed by HB 47 bring all of the state's pension plans under common oversight "to help strengthen them to ensure their long-term reliability," he said.
The liabilities for the teachers' plan are significant and the state has not funded its actuarially annual required contribution for several years.
In a Jan. 26 report, Standard & Poor's warned that state's AA-minus issuer credit rating could be downgraded if Kentucky doesn't take action during this year's legislative session to address pension reform and funding.
It was unclear what if any action would take place with the March 24 end of session looming.
Lawmakers remained at odds over the fate of House Bill 4, which had already been stripped of a plan to issue pension obligation bonds to fund a portion of KTRS' unfunded liabilities.
A conference committee continued working on different versions of HB 4, including issuing notes to fund the fiscal 2016 ARC, phasing-in the full ARC over several years, and further study to deal with funding KTRS' unfunded liabilities.
"It is very possible that an agreement could still be reached," KTRS general counsel Robert "Beau" Barnes said late Monday, though he acknowledged time was running out. "Given the S&P Jan. 26 analysis, it appears that at least this rating agency may downgrade the Commonwealth's credit rating if nothing is done this session."
Even if the conference committee reached an agreement on HB 4, it would still require approval by both chambers, according to a spokesman for the General Assembly. He predicted that the session would run late into the evening.