The Kentucky Senate on Wednesday approved a bill that would require more transparency in how the state’s three public pension systems conduct business.
But it was a different part of Senate Bill 2 — one that would strengthen Gov. Matt Bevin’s control over the systems — that critics said worried them.
In particular, the bill would codify, or write into law, Bevin’s executive order last June that reshaped the governing board of the Kentucky Retirement Systems, removing chairman Thomas Elliott and giving the governor four more appointees. Altogether, the KRS board now has 11 gubernatorial appointees and six members elected by active or retired public employees.
“This marginalizes the elected representation on the board,” said Jim Carroll of Kentucky Government Retirees, a Facebook-based advocacy group that monitors state pension issues. “The governor gets to pick the chairman, the vice chairman, the executive director — it’s the governor’s board now.”
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The bill requires greater disclosure by KRS, which provides benefits for more than 355,000 people who have worked for local and state government; the Kentucky Teachers’ Retirement Systems, which provides benefits for educators; and the Kentucky Judicial Form Retirement System, which provides benefits for judges and state lawmakers.
Among other things, the bill would require the three systems to disclose the investment fees and commissions they pay, including profit sharing, carried interest and partnership incentives. And it would require them to follow the bidding procedures required by the state’s procurement code.
Senate Republican leaders say the bill is one of their most important pieces of legislation so far this session, because it will help the state get better control of its public pension debt, which now exceeds $30 billion.
The bill proceeds to the House, where similar versions have died in the past. But with the House under Republican control, its chances look much better, said the sponsor, Sen. Joe Bowen, R-Owensboro.