Governor starts process for comprehensive audits of Kentucky’s pension systems
After the 2016 General Assembly and governor secured funding in the state budget for audits of Kentucky’s three retirement systems, Gov. Matt Bevin has initiated the process to get those reviews done by the end of the year.
On Thursday, the governor’s office announced a request for proposals (RFP) for a “Pension Performance and Best Practices Analysis.” Within the RFP document issued Wednesday, a deadline of June 30 is set for firms interested in conducting the audits to submit their bids.
The RFP states that the primary objective of the pension systems review is to “advise and provide the Commonwealth of Kentucky with complete, accurate, and independent financial and other information relating to the current and projected future financial situation of the Plans.”
Key points laid out in the RFP to be reviewed in the comprehensive analysis of the Kentucky Retirement System (KRS), Kentucky Teachers’ Retirement System (KTRS), and the Judicial Retirement Plan include:
- “critical” review of past revenues and expenditures to identify reasons for the current financial status of the three plans
- a comparison of state retirement benefits with those offered in the private sector as well as pension systems used in other states
- analysis of defined contribution plans
- evaluation and advice regarding the appropriate actuarial assumptions for each system
- review of all fees and investment arrangements
- assessment of staffing at systems
- evaluation of boards and qualifications
- analysis and recommendations for cost savings and revenue options
- best practices on a number of areas within the pension systems
There is much more included in the RFP that the governor’s office is requesting be studied during the comprehensive analysis. View the RFP document here.
The consultant’s report will be due December 31, 2016—meaning it could be a hot topic during the 2017 session of the General Assembly.
The Kentucky Chamber of Commerce has been calling for a comprehensive performance audit of the Kentucky Retirement System since 2014, with criteria very similar to that laid out by the governor.
The Kentucky Chamber has applauded Bevin’s focus on the pension systems and the action of the governor and the legislature to take action on completing reviews of the ailing systems.