HAZARD—Small and local government entities in the Commonwealth might be in for a rude awakening in 2015 when the federal government’s new accounting standard forces new pension liabilities to be reported by the state as well as those entities—including those in Perry County.
The Government Accounting Standard Board (GASB) recently implemented a new government pension reporting standard, which will require local and state government entities with pension plans to start reporting what they owe to the pension funds as liabilities—this could potentially be detrimental to some agencies depending on how much their state funds the pension plans.
According to Bloomberg, Kentucky is state with the second most underfunded pension plans, with only a 46.77 percent funding ratio recorded in 2012.
Kentucky public employee pensions are how government employees in the state receive retirement benefits. The three separate pension funds in the state, which are overseen by the Kentucky Retirement System (KRS) include the Kentucky Employee Retirement System (KERS), the County Employees Retirement System (CERS), and the State Police Retirement System (SPRS).
These systems touch nearly every aspect of government in the county, and could affect the already tight budgets of local government entities including school boards, city commissions, and fiscal courts.
The changes to the reporting standards will not take place until the fiscal year beginning June 2015, though, so agencies should have time to prepare.
The Herald reached out to numerous local government entities in the county, including the Perry County Fiscal Court, the Perry County School Board, and the City of Hazard, though none were able to respond with comment about the new standards before the time of press.
The Herald also contacted the City of Hazard’s certified public accountant (CPA) Chris Gooch, however, he was also unable to return a request for comment before the time of press.
The KRS’s pension has been troubled for a number of years, with legislators failing in recent sessions to pass any reform. Now KRS faces a class action lawsuit, filed in June, from the City of Fort Wright, for alleged “high risk investments.”
Amelia Holliday can be reached at 606-436-5771, or on Twitter @HazardHerald.