Louisville Metro Council approves resolution calling on Frankfort to separate CERS from KRS
Louisville – By a unanimous vote, the Louisville Metro Council has approved a resolution calling on the Kentucky General Assembly to separate the County Employees Retirement System (CERS) from the Kentucky Retirement System (KRS) and create a separate board to administer the fund.
“Cities and counties have always paid what was asked of them. CERS is much better funded than other systems and it's on an upward trajectory. The fund should be governed by a board which reflects the employers and employees it covers, meaning local control for local pensions,” said Councilman Bill Hollander (D-9), a primary sponsor of the Resolution. “I am pleased that the Council is unanimous in supporting the Free CERS movement and I hope the proposal will be taken up in any special session dealing with pensions.”
The General Assembly is facing a possible special session to be called by Governor Matt Bevin to deal with the funding problems of KRS.
“The failure to fully fund and support the Kentucky Retirement System has been a problem that has spanned decades. I commend Governor Bevin for his willingness to take on this issue and I am hopeful that he will listen and incorporate our thoughts into his call for a special session,” said Councilman Robin Engel (R-22), who is also a primary sponsor of the Resolution.
The Resolution notes CERS is currently funded at 62 percent, a higher funded ratio than it was prior to passage of the 2017 Senate Bill 2 which attempted to make changes to the state’s pensions systems. KRS is the worst funded system in the U.S. and is set to undergo financial hurdles of “persistent funding shortfalls, elevated contribution levels, unsustainable payout ratios and in the worst-case scenario, the potential for the complete depletion of the asset base;”
Recently, Kentucky State Budget Director John Chilton indicated if no legislative changes are made to the system, Louisville Metro would pay $43.5 million more in pension payments to CERS beginning July 1, 2018. The Increased contributions result from recent changes made by the KRS Board.
Once signed by Mayor Greg Fischer, a copy of the Resolution will be sent to every members of the Kentucky General Assembly.