Bill Thielen, head of the Kentucky Retirement System from 2006 to 2016, recently wrote an opinion listing reasons for the catastrophic funding deterioration of the Kentucky Employees Retirement System over the last 17 years. He indicates the problem with KERS funding has been the failure of past governors and legislators in 15 out of 22 years to pay actuarially required contributions set out by KRS actuaries. He listed other contributing factors, such as the recessions of 2001-2002 and 2008-2009, resulting in negative investment returns.
Thielen does not comment on the involvement of the KRS in KERS’ present status. There have been questions relating to its investment strategies, decisions, results, professional consultant fees, accountability and transparency over the years.
There is little doubt that past governors and legislators, given shortage of revenue and other priorities, decided to ignore the needs of Kentucky’s public pension systems. Every governor and legislator who served since 2000 is responsible. The legislature did not focus on the issue until 2013, with the first meeting of the Public Pension Oversight Board. We will now see if members and retirees will be held responsible for the inaction of others.