WHAS11 coverage

(WHAS11) - Kentucky's pension system is underperforming for more than 400,000 retired and current state employees and teachers covered under the pensions. They are not earning as much from their investments as similar systems in other states. And, a report released Thursday says it's making the pensions systems' financial problems worse.

Kentucky lawmakers are getting ready for a special session to try and cut into the $26 billion hole in Kentucky’s public retirement systems.  It would help if the retirement systems for teachers and state employees started getting a better rate of return on their investments, according to a report released Thursday.

The money that Kentucky teachers, state employees and taxpayers are pouring into their  retirement systems isn't earning as much as similar pension systems in other states, that's according to a report released by a legislative committee in Frankfort.

The report looked at the Kentucky retirement system for state workers and the teachers’ retirement system.  It found that over the past three years, the rate of return on stocks and other investments for state employee pensions in 22 other states was 13%, compared to 11.4 % for the biggest chunk of the Kentucky Retirements System’s investments. 

The average return for other teachers systems was 14.2%, compared to 9.3% for Kentucky’s teacher retirement program. 

The managers of the two pension systems say the returns are down because their hands have been tied, but they say they are working on it

More than 400,000 current and retired teachers and state employees are members of one of the two pension systems.

The pension fund managers say improving the returns on investments won't come close to solving their multi billion dollar shortfall, but lawmakers and their staffers say it would sure help:

If the pension systems could improve their investment returns by 1%, Governor Beshear says it would save taxpayers tens of millions of dollars each year. 

The special session to pass those changes is tentatively scheduled for June 23rd.