State Retiree Benefits Fact Sheet – Kentucky

Kentucky had one of the most dramatic declines in pension funding levels from 2000 to 2006 of the 50 states—a recent trend that could cause trouble if it persists. Government contribution rates fell short for both the Kentucky state employees' fund (particularly the non-hazardous portion) and the smaller state police fund in nine of the past 15 years. The Commonwealth has done a better job keeping up with funding requirements in its teachers' fund. On the non-pension benefits side, Kentucky has included retiree health benefits in its pension system. In the past, when other states were not paying attention to retiree health benefit costs, this practice tended to deflate the funding level of Kentucky's pension systems. Now it gives Kentucky a small jump on other states—in fact, Kentucky was one of just 13 states with any assets set aside for non-pension benefits as of 2006.