This week was a wake up call for anyone who doesn’t think the state’s pension problems will impact them.
Our fire chief and a majority of the top personnel at the police department retired — most of them in the prime of their working lives — in some part because of the reeling retirement system.
It’s no secret that the system is broken, the victim of abuse, neglect and mismanagement. This was a stark reminder that if we don’t fix it we will continue to lose highly qualified people in vital roles and not be able to attract them in the future.
The State Journal’s Alfred Miller reported today that the board of Kentucky Retirement Systems, which includes the County Employees Retirement System for local public employees, made downward projection of the yield from investments alongside an expected drop in payroll growth. That means local governments are being asked to pay more — much more.
The overall $11.1 million cost to Franklin County’s government entities could increase by $4.4 million. Fiscal Court and Frankfort Plant Board face $1 million increases, while the city of Frankfort could be staring down a $1.7 million hike. Franklin County Treasurer Susan Laurenson referred to the looming increase as a big bad wow.”
That stark reality has prompted some people rushing toward retirement, but also created a completely sane panic among others.
David Eager, interim KRS executive director, told Miller he has been fielding calls from many of them. He tells them if they were hired before 2013 they will be OK, correctly telling them they have an “inviolable contract.” He might not be the one to call.
That “inviolability” has already been questioned by those who view this as a chance to snuff public pensions out in favor of a 401K-style system similar to many private sector employers. Your representatives at the Capitol are not among them, but anyone rightfully concerned about this disaster should watch carefully how the rest of the legislative and executive branches act in the coming months more than listening to what they say.
Now that everyone’s been allowed to enjoy their vacations, it’s time for legislators to lock themselves in a room until they come up with something that doesn’t involve breaking promises. We are loathe to suggest this as a “solution” to anything, but if that involves increasing taxes they shouldn’t be afraid to do it.
It would help if they could build a fortress-size lockbox around the funds in the language of the bill and then throw away the key, but a commitment to a revenue stream would be a strong start.
There is a lot of blame for the sputtering pensions to go around but none of it rests with those counting on them — or all of us who count on them. If nothing is done to make a meaningful plan to address the problem in the upcoming special session it will be a shame on the body already most responsible for it.
It has been a matter of public stewardship, if not decency. Now a matter of public safety.