After advocating for many changes to the state’s struggling public pension systems during the 2015 session, the Kentucky Chamber of Commerce sent a letter to the co-chairs of the Public Pension Oversight Board expressing the urgent need for work on these issues during the interim.
In the letter, Kentucky Chamber President and CEO Dave Adkisson noted the successes seen in recent years to improve the systems, but expressed disappointment in the lack of action by the General Assembly to pass recommendations put forward by the board and supported by the Chamber.
A few pension bills passed in the 2015 session including legislation to expand the jurisdiction of the Public Pension Oversight Board to include the Teachers, Judicial and Legislative pension systems and ensuring any entity withdrawing from the Kentucky Retirement System pay its unfunded liability.
However, there were many pension bills dealing with transparency and other issues left on the table. From the Chamber’s perspective, two of the most important changes needed immediately include the hiring of an independent actuary and funding for state Auditor Adam Edelen to conduct a comprehensive performance audit of the system, which the Chamber called for last year.
In the interim, Adkisson requested that the Public Pension Oversight Board take the following actions:
- Immediately hire an independent actuary and/or a national pension expert to evaluate the actuarial assumptions made by the current actuary for the retirement systems.
- Direct the Executive Branch, in the materials submitted to the legislature during the next budget process, to clearly identify the percentage of the full ARC being requested for the pension systems and to identify the source of funds being used.
- With the Public Pension Oversight Board now to have jurisdiction over the Kentucky Teachers’ Retirement System, the board should convene hearings prior to the 2016 session on the use of pension obligation bonds to fully understand the potential impact to the state..
- Provide funding to the Auditor of Public Accounts to conduct a performance audit of Kentucky Retirement Systems.
Adkisson closed the letter to legislators on the board asking for their help in addressing the biggest financial issue facing the state.
“As we have stressed in previous correspondence and in personal meetings with you, the Kentucky Chamber believes the pension issue is the most pressing challenge to the financial stability of the Commonwealth of Kentucky. We know you share our concern,” Adkisson said. “The Chamber will continue to communicate with you and the members of the board on this matter, and believe the actions we have suggested in this letter will have a positive impact on our pension systems and the Kentucky taxpayers who finance them.”