The fate for Kentucky’s pensions at public universities plus a number of quasi-state agencies like health departments and mental health entities is in limbo.
The state legislature adjourned last night without taking final action on the bill that had been months in the making. Under the proposal, many university employees could be covered by a separate defined contribution plan.
Eastern Kentucky University Vice President David McFaddin said he worries that such a move would place a heavy financial burden on the state and may not take into account the number of employees. “The idea that there is going to be membership growth that’s going to be lost by us not participating I think is a fallacy because we are not hiring new employees and we are not growing that population of employees and we won’t be, particularly we won’t be given the increases in contributions that are going to be required,” said McFaddin.
McFaddin said he could see separate bills to address regional universities from the quasi-state agencies. The EKU administrator hopes conversations over the next week or so will result in an agreement. “To see if we can come up with a solution that addresses specifically the higher education pension liability issues. We were hopeful to be part of those conversations and be able to help move that forward. We’ll hope to work with the executive branch as well to make sure that it’s a bill they can support when delivered to the governor,” said McFaddin.
The legislature returns on March 28th, at which time it could finalize a pension strategy.