Proposal would overhaul Kentucky's pension systems

jcheves@herald-leader.comMarch 5, 2014 

FRANKFORT — A House bill filed Tuesday would enact several reforms on the state's pension systems and possibly reshape them.

House Bill 546, sponsored by Rep. Jim Wayne, D-Louisville, would set competitive bidding rules and ban use of third-party "placement agents" for the Kentucky Retirement Systems, the Kentucky Teachers' Retirement System and the Kentucky Judicial Form Retirement System, which includes judges and state legislators.

It would require KRS and KTRS to disclose online their investment fees, holdings, commissions, contracts and property purchases. It also would require gubernatorial appointees to the KRS board of trustees to have at least 10 years of investment experience rather than a general background in "finances," such as community banking.

Finally, the Public Pension Oversight Board would study and issue a report by Dec. 1 on whether the General Assembly should transfer judicial and legislative pensions to KRS and remove from KRS the local government pensions held in a plan called the County Employees Retirement System. Local governments complain that they are forced to pay exorbitant pension contributions to compensate KRS for the largely unfunded state retirement plan.

"The whole system needs to be examined," Wayne said Wednesday. "We did this quick 'pension reform' fix last session, and people said, 'Oh, the whole thing is fixed now.' But that's just not so."

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