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Seven Counties Court Ruling May Increase Kentucky Pension Costs

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FRANKFORT — Kentucky state government could face increased pension costs if a court ruling is allowed to stand, state lawmakers were told on Wednesday.The ruling, which is pending appeal, said quasi-governmental agencies such as Seven Counties Services can abstain from paying into the ailing state pension system.If the appeals court agrees with the ruling, the state would have to cover $2.5 billion in unpaid pension obligations, Kentucky Retirement Systems executive director Bill Thielen said.“The actuaries have determined it would increase the contribution rate over a 20 year period, it would ratchet up a little bit each year over 20 years about 6.5 percent, which would amount to about $2.4 billion of additional moneys over the 20 year period that would have to be picked up by the remaining employers in the system," Thielen said. Related: Kentucky's Zombie Pension ProblemSeven Counties filed for bankruptcy last year, and a federal judge ruled in May that the organization does not have to pay into the retirement system, which has more than $17 billion in unfunded pension liability.Thielen said KRS will file a motion to determine jurisdiction for the appeal by the end of this week.Lawmakers said they will try to have a legislative remedy ready for next year’s General Assembly session.