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Elizabethtown has joined cities around the state in calling on the Kentucky General Assembly to reform the County Employees Retirement System, which could make it sustainable and secure for current and future employees.
Elizabethtown City Council approved a resolution supporting reforms during a special called meeting Monday after tweaking a resolution drafted by the Kentucky League of Cities. Vine Grove City Council approved a similar resolution last week.
Mayor Tim Walker said the city paid around $822,400 into CERS for retirement benefits in 2003 but will pay more than $3 million this year.
“It’s time they address it and quit kicking the can down the road,” Walker said of the legislature.
The resolution approved by the city states the pension liability has increased to $7.131 billion since 2000 even though cities have paid what is required. This unfunded liability indicates “systemic problems” in the program with employer contribution rates expected to climb, according to the resolution.
Recommendations offered by the Public Pensions Task Force call on the state to make several concessions to fix the system, including fully funding the plan by 2015.
Other recommendations include a repeal of required cost-of-living increases on pensions and a hybrid cash balance system for new hires that would require workers to save more for retirement. The task force also called on the state to strip new hires of an ironclad contract protecting their retirement benefits from reductions and called for a two-year break after a state worker retires before he or she can be re-employed to discourage “double dipping.”
KLC has said it will lobby for adoption of a defined contribution, hybrid or cash balance plan for all new employees while leaving most current employees in a defined benefit plan; eliminating automatic cost-of-living adjustments to retirement benefits while offering the option for workers to pre-fund their cost-of-living adjustments; adopting an 80 percent full-funding standard in an effort to reduce employer contributions; and enacting “reasonable changes” to the structure of health insurance benefits.
Retirement reform has been identified as KLC's top priority during the 2013 session.
“The lack of any action on public pension reform during the 2013 regular session may worsen the situation for Elizabethtown and jeopardize the fiscal solvency of Kentucky cities,” the resolution stated.
“It’s time it’s addressed,” he said.
Marty Finley can be reached at (270) 505-1762 or firstname.lastname@example.org.