canadian goose jacket Kentucky’s big pension mess
canada goose coats on sale The Kentucky Employees Retirement System (KERS Non Hazardous), the nation most poorly funded state pension with 23 percent of the assets needed to cover liabilities, suffered a legal blow last week. As of last June, KERS had only $3.1 billion of assets to cover the $11.3 billion in retirement commitments that it had made and $8.26 billion of Canada Goose Jackets unfunded liabilities.
canada goose black friday sale Should the 41,000 active employees, 40,000 inactive employees and 37,000 retirees in Kentucky be worried canada goose factory sale about the security of their pensions? Given recent events, they probably should. Bankruptcy Judge Joan A. Lloyd ruled that an insolvent non profit agency, Seven Counties Services, is not buy canada goose jacket part of the Kentucky government and may leave KERS. This could clear the way for other financially strapped non profit agencies across the state to flee soaring pension costs and leave KERS with more stranded Canada Goose Coats On Sale liabilities. (Judge Lloyd’s opinion here). The Kentucky Courier Journal wrote:
opinion, issued late Friday in federal bankruptcy canada goose coats court, found that Seven Counties qualifies as a private, non profit Canada Goose Online corporation rather than a governmental unit and can move forward on its Chapter 11 bankruptcy case without state permission. That essentially allows Seven Counties, the community mental health center that serves 32,000 clients in the Louisville area, to withdraw from the severely underfunded state pension uk canada goose outlet system known as Kentucky Retirement Systems.
canada goose deals It also sets a potential precedent for 12 other community mental health centers and dozens of quasi governmental agencies, such as health departments and rape crisis programs, that are struggling to fund pension obligations. If all the mental Canada Goose online health agencies were to leave, the remaining plan employers canada goose coats on sale would need to pay an additional $2.4 billion, according to the state expert.
The city of Fort Wright, Kentucky canada goose clearance filed a separate to change the way the KERS Board of Trustees manages assets on behalf of the County Employees Retirement System (CERS) (funded with 60 percent of assets required to meet liabilities).
canada goose store Parry said that the basis of the lawsuit boils down to a matter of law. Assets held by the CERS cannot be legally invested canada goose uk shop into hedge funds because KRS is prohibited from doing so under state statute.
canada goose coats The lawsuit would affect about 500 CERS member entities across the state. If successful, the canada goose suit could set a precedent for other city and county groups seeking to divorce themselves from KRS.
Kentucky’s big pension mess
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The City of Fort Wright asks the court to rule that CERS assets must be invested in accordance canada goose uk black friday with fiduciary standards canada goose black friday sale set forth in the Kentucky Statutes and to prohibit the Board from continuing to commingle CERS funds canadian goose jacket and KERS funds for investment purposes.
Canada Goose Jackets The City also asks the Court to require the Kentucky Retirement System to account for the funds that have been canada goose clearance sale placed into these high risk investments within the preceding five (5) years and to account for and repay all of the substantial management fees that were paid to managers of hedge funds, private equity funds and other such high risk investments.
buy canada goose jacket cheap Sounds wicked and possibly expensive.
Here is how the assets of the CERS fund was allocated as of June 30, 2013. It looks like some assets might be outside of law KRS 386.020 that dictates Canada Goose sale how CERS assets are invested:
canada goose clearance sale Pew Charitable Trusts worked with the Kentucky cheap Canada Goose General cheap canada goose uk Assembly to pass pension reform in 2013 and canada goose store has published several reports about KERS. Pew’s 2013 report included the following chart that details how much of the required actuarial contribution Kentucky Canada Goose Outlet had made:
buy canada goose jacket Pew’s chart combines contributions from the State of Kentucky (KERS) which has been making around half of its ARC with CERS, which has contributed over 100 percent of its ARC. Specifics here (Chart: Ballotpedia):
Canada Goose Parka Slideshow (5 Images)
Canada Goose online Counties and municipalities in CERS have made their full contributions for the uk canada goose last five years canada goose uk outlet while the state level KERS has made less than 50 percent of required contributions.
cheap Canada Goose Pew detailed the 2013 KERS pension reform:
For almost a decade, policymakers had regularly shortchanged the Kentucky Retirement Systems. The 2008 pension reform legislation was supposed to remedy the system gaping funding deficiency, but only after a long ramp up; buy canada goose jacket cheap the state was not required to make full payments until 2024. The 2013 reform committed the state to fully fund the public pension system beginning with the next biennial budget [fiscal year 2015 2016].
The Kentucky Legislature is already battling over cuts needed to balance the 2015 2016 budget. The Republic reports:
The [higher education tuition] increases come after the state legislature approved a 1.5 percent budget cut for higher education. And they come as Democrats and Republicans battle for control of the House of Representatives.
canada goose The increases are already an issue in the 2015 governor race. Democratic Attorney General Jack Conway made higher education part of his platform when announcing his candidacy earlier this week.
Beshear canada goose sale proposed budget, which lawmakers are currently considering, includes an additional $101 million in the next fiscal year and $106 https://www.canadagoosesale.info million in the year after for contributions to KERS and another Kentucky Retirement Systems plan, the State Police Retirement System.
Canada Goose sale The extra $101 million is good, but KERS is underfunded by $8.2 billion and the liabilities and legal risks are piling up. Kentucky faces very difficult political and legal choices Canada Goose Parka as the assets in its core pension fund (KNONHAZ below) continue to decline.