Pension system audits to begin in early September, Bevin administration says
The evaluation process for choosing a firm to audit Kentucky’s retirement systems is close to complete and the Bevin administration hopes the work of examining the pension systems can begin in early September, State Budget Director John Chilton said Monday.
At a meeting of the Public Pension Oversight Board Monday, Chilton explained that a search committee is close to choosing a firm after the governor’s office announced a request for proposals (RFP) for a “Pension Performance and Best Practices Analysis” in May with a bid deadline of June 30.
Chilton said work should begin in early September on audits of all three retirement systems.
In response to a question from Rep. Brent Yonts about whether or not the firm would be able to complete all aspects of the examination done by the deadline set for the end of the year, Chilton said all firms under consideration have said they can have the reviews done by December and added that much of the information is already available.
Representatives from the Kentucky Retirement System (KRS) stated during their testimony that they have already turned over documents to the Bevin administration for the audit.
All three pension systems testified in the meeting about their investments and where they stand financially.
In their testimonies, representatives from each of the three systems expressed concerns about not meeting projected return on investments due to a changing market in the next three to five years, which could mean the need for more money from the state for actuarially required contributions (ARC) and the need for the systems to sell off more assets in order to cut checks to retirees.
However, the Kentucky Retirement System (KRS) and Kentucky Teachers’ Retirement System (KTRS) both noted the increased contributions to their systems by the state in the most recent budget and discussed the positive impact of the increased contributions.
KRS officials explained that the $50 million in additional funds allocated for the state police retirement system, which is a plan within KRS, has made a huge impact and stated that if the legislature were to give another $50 million in the next budget cycle that it would help get that plan back on track.