On behalf of Kentucky employers, Chamber President and CEO Dave Adkisson presented recommendations to lawmakers on how to fix Kentucky’s ailing public pension system. The Task Force on Public Pensions met at the Capitol and heard several hours worth of testimony from both employers and employee groups on how to address Kentucky’s unfunded pension liability.
The Chamber was joined by other employer groups, including the Kentucky League of Cities and the Kentucky Association of Counties in many of its recommendations. Recommendations included:
- Reduce health insurance costs – Health insurance costs constitute just over half of the required pension contribution. The Chamber suggests that state employees should contribute a minimum of $50 per month to their health insurance plan. Also recommended was a more aggressive wellness plan for public employees. The current plan is only voluntary.
- Freeze COLA: Currently a 1.5% annual cost of living increase is provided to retirees, unless suspended by the legislature. This provision has been suspended in the current budget, but the Chamber recommends that practice be continued until the pension system is more adequately funded.
- Move to Defined Contribution Plan – Defined benefit plans have largely been phased on in the private sector in favor of 401(k)-style plans. The Chamber recommends new hires be moved to a defined contribution plan and incentives offered to current employees who convert to the new plan.
Other recommendations were made before the task force. To read the Chamber’s full testimony, click here.
Filed under: Government Modernization, Kentucky Competitiveness Tagged: | 401(k), employers, Frankfort, Kentucky, Kentucky Association of Counties, Kentucky League of Cities, pension liability, pensions, public pension in kentucky