Really, ouch:

The commonwealth’s other long-term liabilities are high, with the funding level for the Kentucky Employees Retirement System (KERS) only 36.1% as of June 30, 2011, down from 97.3% funded as of June 30, 2003. Funding levels for the commonwealth’s other retirement systems are better but have deteriorated as well due to investment losses and the failure to fully fund annually required contributions. Some pension reforms have been enacted requiring more years of service and higher retirement age for certain workers, with the goal of reducing the future liabilities of the state’s pension systems. The reform legislation also mandated increased annual pension funding but allows fifteen years to reach full funding of the ARC, in the case of KERS, and slightly shorter ramp up periods for the other systems. As a result, the funded status of the pension system is likely to decline significantly before it begins to improve and future pension payment requirements will place a greater demand on budgetary resources than would have otherwise been the case.

All because of the nasty, underfunded pension.