Not-so-fun facts on Kentucky's defined benefit public pension retirement systems

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Did you know...

• that while private sector defined-benefit plans must be 80% funded in Kentucky, public sector defined-benefit plans have no such legal requirements?

• that while defined-benefit plans continue to be the public sector's retirement package of choice, in the private sector the number of defined-benefit packages has fallen by about 80% since 1985?

• that the Kentucky Teachers Retirement System assumed rate of return on investment is 7.5 percent, but the actual rate over the last five years was only 3.8 percent?

• that Kentucky has the 11th lowest combined employee-employer retirement contribution as a share of wages?

These are just a few of the reasons for why the Bluegrass Institute recommends that the first fundamental reform Kentucky must make to alleviate its $34 billion public pension crisis is to replace its woefully unreliable and underfunded defined-benefit plan with a financially sound defined-contribution plan.

Check out 15 other proposals to dig our way out of the debt hole here!