by House Republican

Speaker Jeff Hoover

This past week, as was widely reported, a presentation regarding public pension systems was made by PFM to Kentucky’s Public Pension Oversight Board. PFM is an independent, third party consulting firm that was hired by the state to fully examine the issues with the current structure of our systems and to make recommendations on how to put them on more solid financial ground.

Like many states, Kentucky has found itself in a financial crisis when it comes to the funding of our public pension systems. There are a host of causes that have led us to this point, including the economic recession of 2008, chronic underfunding of the systems, and structural obstacles that are unsustainable. Some of these were preventable, while others were out of anyone’s control. However, we now find ourselves in the unenviable position of having to make changes to the systems if we are to have any hope of them remaining viable in the future.

PFM outlined a series of recommendations of ways to climb out of this financial hole. Some of these were good, while others are not feasible to enact. I do thank them for their efforts, though, and I believe their work will help us, as legislators, as we craft a proposal to improve the situation.

Over the course of the past few months, legislative leadership has been meeting with Governor Bevin and pension experts. These have been weekly meetings, often lasting four or five hours. I can assure you that each and every person in that room is dedicated to finding a solution to this problem. To be honest, that solution has not been fully identified yet, as this issue is complex and multi-faceted. But I am optimistic that our work will lead toward a compromise that will put our state in a much better position going forward.

The situation we find ourselves in is dire and, quite frankly, affects each and every person in the Commonwealth, not only current and retired state and public school employees. If structural changes are not made to the pension systems, funds will have to be diverted from such necessary public services as education and public safety in order to meet our legal obligations. That is a scenario I know no one wants to see occur.

Additionally, I want to ensure that our public employees and retirees are held as harmless as possible during this process. I am well aware that these people, some of the best our communities offer, have dedicated their careers to helping others.

Whether those people be teachers and administrators, first responders, social workers, road department employees, or the host of other public servants in the pension systems, our communities could not thrive and be as great as they are without the dedication of these folks. They deserve our respect, gratitude and full-faith efforts to ensure they have a financially sound retirement system as possible.

I can say without hesitation that this is the most consequential of issues that our Commonwealth has faced during my 20 years serving in the Kentucky House of Representatives. How we address this issue will not only affect our current public employees and retirees, but it will set the stage for decades to come. While I, nor anyone else, has a fully processed solution at this point, I can pledge to you that I will work diligently, gather facts, listen to input from all affected parties and make decisions to the best of my ability.

I appreciate the reasonable thoughts and opinions that have been shared with me by many over the past few weeks and I welcome input from all. I would ask for your thoughts and prayers as I, and my colleagues, address this issue both leading up to and during a special session that is likely to be called.

If you would like to stay up-to-date on all legislative action of interest to you during this session of the Kentucky General Assembly, you can visit www.lrc.ky.gov or call the LRC toll-free Bill Status Line at (866) 840-2835. As always, I welcome your thoughts and comments. You can send me a message either at Jeff.Hoover@lrc.ky.gov or by calling (800) 372-7181.