Bowen reaffirms call for more pension system transparency
Responding to a letter from the Kentucky Retirement System, Sen. Joe Bowen doubled down on his call for more transparency and oversight of the state’s two largest retirement systems.
In a meeting of the Senate State and Local Government Committee Wednesday, Bowen explained that he feels the retirement systems need to be held to the same standards as other state agencies which require Senate confirmation of appointments and the same ethics requirements. Senate Bill 2, a bill filed by Bowen, would require those things.
Bowen’s remarks came after reading a letter from KRS head Bill Thielen to the House State Government Committee Chair Brent Yonts where Thielen expressed his concerns with Senate Bill 2, saying that the Senate confirmation of trustees and the executive director of KRS would cause “significant disruption” to the system.
In the letter, Thielen also said he believes it is unnecessary to put the systems under the model procurement code (45A) which makes state agencies subject to ethics laws, anti-discrimination rules, contract review and anti-kickback rules as well as gives the state the ability to remove people mismanaging state dollars and other important protections.
Bowen responded to this notion by saying he felt there is no sound policy reasoning for the systems to be exempt from 45A and added that he is “disappointed” that in a time where the system is suffering severe issues and is in dire financial straits the KRS executive director would object to these types of simple and healthy changes.
The conversation continued on the Senate floor where Senator McDaniel expressed the need for greater oversight and summarized the cost to the Commonwealth of the pensions. Specifically, he stated that in the second year of the biennium 12.4% of the budget will be spent on pensions. That amounts to more than $1.25 billion or more than $250 for every man, woman and child.
Senator Bowen reminded his colleagues that the Senate passed Senate Bill 2 38-0 stating that every member of the Senate realized the importance of greater transparency. He called on his colleagues to lobby members of the House of Representatives to support the bill.
The Kentucky Chamber supports Senate Bill 2 and efforts by the legislature to ensure greater transparency and oversight of Kentucky’s retirement systems.