By evaluating the scale of Kentucky’s retiree benefit funding pressures, analyzing the factors that have contributed to this challenge, and benchmarking approaches elsewhere, PFM’s Report #2 has provided important background and context for developing a plan to move forward.
In the PFM’s forthcoming Report #3, they will present ideas and alternatives for improving the long-term security, reliability, and affordability of the benefit programs. Building on the many factors that have led to the current conditions, including PFM’s previous Report #1 on transparency and governance, areas that PFM will address in Report #3 are expected to include:
Actuarial methods and assumptions
Investment practices and approach
Benefit levels and risk exposure
Prior to PFM’s Report #3, stakeholders will be able to submit questions, concerns, and suggestions that will be considered by PFM and policy makers.
Through past legislative reforms, recent Board actions, and significant additional funding in FY17-18, the Commonwealth has already taken positive steps forward. Nonetheless, strong, corrective actions still remain to be taken.
Otherwise, these employee benefit plans are not sustainable.
Source: PFM Group Consulting report, May 22, 2017. For more information about this topic, click here to see relevant portions of that report.