Had to wait until I got to real computer to be able to multiquote.
Sorry Norm.
I'm not understanding...
Does this mean you could choose a 25 year payout when you retire vs. lump sum? When you say all can withdraw and stop making payments, does that mean you as individuals or agencies would no longer pay into system.
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KY Retirement systems are set up that each employee contributes between 7 to 15% of their pre-tax dollars depending on profession. (KY can raise that % anytime they want w/o legislation.) Then, the sponsoring agency is supposed to contribute a % to the retirement account. Think of like an employee match, except that it is never the employee's money. Sponsoring agency means state university, county government, etc. So, the system worked as it required employee contribution, employer contribution, and investment interest.
Prior to the first Republican administration in 2004, the retirement system was funded adequately. During that administration, large amounts of the retirement system were used to hire placing agents with multi-million bonuses to recommend investments be moved to risky hedge funds, where of course, the capital lost. After a successful 4 years of loss, the next Democrat governor (2008-2016) kept the same principles, doubling-down on the bad investment strategies and losing more money.
Now this new law under this new Republican governor changes an old law that said if a state university or county government chooses to withdraw from the employer contribution, they had to immediately pay an actuarial lump sum amount to the retirement system to catch up 25 years of employer contributions at once. This of course prevent any employer from leaving the retirement system. This new law says they can defer that lump sum payments over 25 years, but there is no requirements for that may be deferred.
So, for example, under the old law my employer decided.to quit the system, let's pretend they would owe $100 Million. Now, with the new law, they could pay $1 a year for the next 24 years, promising to pay $99,999,976 the 25th year.
Thus, by dismantling the investment returns and taking out the employer contributions, the system implodes, resulting in a bankruptcy, and the stealing of all those employee contributions.
Granted, that is the worse case scenario. The city of Detroit retirement systems went through a similar issue a decade ago, which only resulted in a 7 or 9% reduction for all retired employees' benefits.
It is just a continuation of what is happening at the national level. Billionaires tell millionaires to use all types of media to keep people distracted from realizing that the wealthiest of Americans are taking away money from non-wealthy Americans. And, I don't even want to change the system. I really just want the money taken from my paycheck. I did the math. To date, I have earned an annual 3% return on my money. Thankfully, I invested the same % of that money in my own IRA so that I have my retirement.
