Bluegrass Institute report: Private groups gorging at state pension trough

State workers at politically connected private agencies eligible for taxpayer-funded retirement, health care benefits

For Immediate Release:

Tuesday, Oct.11, 2011

Contact: Jim Waters at 270-782-2140

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(FRANKFORT, Ky.) – A new Bluegrass Institute policy brief shows that hundreds of workers at a multitude of agencies – including some private organizations – are feeding at Kentucky’s taxpayer-funded public pension trough.

According to “Future Shock – Kentucky’s public-pension hole: Deep and getting deeper,” even staff members at the Kentucky Education Association, the state teachers’ union, are allowed to join the Kentucky Teachers’ Retirement System – as long as they had prior involvement in any of the commonwealth’s six public employee pension plans.

“Kentucky’s public pension plans are more than $31 billion underfunded and the hole is getting deeper by the day,” said Phil Moffett, the institute’s president and CEO. “We must understand how we got in this hole and what we need to do to get out. Getting private industry and privately employed individuals who work on contract with the state off the public dole is a good start. The ‘Future Shock’ series will shine a bright light on the problem and present solid free-market solutions.”

Also included in Kentucky’s pension plan are a faith-based housing group, master commissioners and their staffs and the Commonwealth Credit Union.

The credit union currently has 365 members in the Kentucky Retirement Systems, including 253 active employees, 83 current or former workers vested but no longer contributing to the plan and 29 current retirees.

A recent report by the Lexington Herald-Leader noted that Commonwealth Credit Union has $890 million in assets and $58 million in annual revenue.

“Why is this healthy and profitable private company getting corporate welfare at taxpayer expense?” Moffett asked.

Responding to claims that Commonwealth was allowed to join the state pension system because “its customers are government employees,” he said: “This seems ridiculous. Wal-Mart in Frankfort probably has a very large group of customers who are state workers. Should they also receive state pensions?”

Today’s release previews a full research report on the state’s ailing public pension system, which currently faces a $31.4 billion unfunded liability.

The institute will release the report, which is authored by Lowell Reese, owner of Kentucky Roll Call, a public affairs publishing company in Frankfort, and former state Chamber of Commerce executive, in sections that address:

• How Kentucky’s pension mess started and grew.

• Who the players are and who voted for the bills.

• Examples of gross abuse of the public pension system.

• Solutions based on free-market principles.

For interview information, please contact Jim Waters at 270-782-2140 or jwaters@freedomkentucky.com.