- Associated Press - Saturday, July 18, 2015

FRANKFORT, Ky. (AP) - A work group formed by Gov. Steve Beshear has started trying to craft recommendations to shore up the Kentucky Teachers’ Retirement System.

The group’s chairman, former state Sen. David Karem of Louisville, said Friday that Beshear gave him no instructions on how to deal with the problem.

Karem said he has no preconceived ideas on any recommendations.

The panel is close to hiring an outside consulting group to help it with its work, he said.

The Lexington Herald-Leader (https://bit.ly/1fdx03m ) reports the group met for nearly four hours Friday. The 23-member panel includes policy officials, including several legislators and education leaders.

The panel has until Dec. 1 to provide recommendations to Beshear, who leaves office days later, on how to lessen the system’s massive unfunded liability.

The retirement system has fallen on tough times. Its unfunded liability - the amount of money it lacks to pay projected future benefits - was $571 million in 2000, meaning it had about 96 percent of the money required to pay future benefits. It now has only 54 percent of the money it needs to pay future benefits.

That alarms Kentucky teachers, who do not enroll in Social Security.

The system serves more than 75,000 active and more than 45,000 retired members. About 92 percent of its members live in Kentucky.

Past recommendations to fix its woes include requiring teachers to work longer than 27 years before being eligible to retire and paying more out of their salaries toward pension costs. There has been no call to raise taxes.

In this year’s legislative session, House Democrats proposed issuing $3.3 billion in bonds for the system but Senate Republicans said they did not want to incur more debt.

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Information from: Lexington Herald-Leader, https://www.kentucky.com

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