The Teachers Retirement System of Kentucky published new numbers indicating that the funding of teacher’s pensions has gone up for the third consecutive year, this time from 57.7% in 2018 to 58.1% in 2019. This trend is encouraging for Kentucky but is only a step in the right direction. Pensions, when underfunded, have contributed to the economic collapse of other states and you don’t have to look far to find one. Illinois has been mismanaged for years and their state pension has played a large part in their sickly state now. Illinois has had to boost taxes to astronomical levels to play catch-up with their underfunded pensions, which has caused the state to lose residents to surrounding states at record levels. We would do well to learn a lesson from Illinois and pursue a solution to our pension’s funding.
You state “Pensions, when underfunded, have contributed to the economic collapse of other states ……………. How does KY’s fund effect other states?…….If that is true we should stop that pronto.
Hi Jerry,
I appreciate your comment and may change the phrasing in the post to make my point more transparent. The intent there is to say that in other states an underfunded pension has lead to the economic collapse of that state. Our pension could only affect other states if it becomes insolvent and our credit rating drops.