Economist: Political willpower needed to solve KY pension crisis

Economist says willpower needed to solve pension crisis

LOUISVILLE, Ky. (WHAS11) – A day after consultants released what some suggest will be a roadmap for solving Kentucky’s pension crisis, a U of L Economics professor suggests that the problem can be solved if lawmakers have the will.

Reporters and the public were shut out of a meeting Tuesday as lawmakers looked to further their conversation about solving Kentucky's pension crisis.

A University of Louisville professor suggests that the problem can be solved but it's going to take political willpower to make decisions that will likely be unpopular with a lot of people.

Stephan Gohrmann is director of the Schnatter Center for Free Enterprise. He's looking at the report released Monday that suggested lawmakers trim down future benefits for state employees, replace pensions with 401(k) accounts and raise the retirement age for most employees.

"The state had a chance to do this twenty years ago,” Professor Gohrmann said. “They had a report that came out saying that a 401(k) would help them become more solvent and they didn't have the legislative will to do it. I thought back then they should have done it so I think today they should still do it and I know the transition part is difficult but, for all new incoming people, a 401(k) works fairly well."

Kentucky Governor Matt Bevin has promised to call for a special legislative session to deal with the pension crisis. That is expected to take place sometime in October.

© 2017 WHAS-TV


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