Pension system transparency being pushed in pre-filed bill
As the state’s pension systems continue to struggle and calls for transparency get louder, Rep. James Kay (D-Versailles) announced Wednesday he has pre-filed a bill for the 2017 session to change the way the systems are conducting business.
Kay’s legislation seeks to “better insulate Kentucky Retirement Systems (KRS) from politics while making the agency more publicly accountable,” according to a press release Wednesday.
The bill comes in the wake of court cases over the re-organization of the KRS board by Gov. Matt Bevin and includes some provisions of a pension transparency bill, Senate Bill 2, pushed by Sen. Joe Bowen in the 2016 session which was strongly supported by the Kentucky Chamber.
According to the press release, Kay’s pre-filed legislation includes:
- Not allowing gubernatorial re-organization of the board of trustees at any time;
- Changing the dynamic of the KRS Board of Trustees so that it is comprised of a majority of elected members rather than appointed members. Under his bill, both the County Employees Retirement System (CERS) and the Kentucky Employees Retirement System (KERS) would elect one more member to serve, while the Personal Cabinet Secretary and an appointed member having a local-government focus would be removed.
- Authorizing other elected trustees to fill the vacancy of another elected member, if that member resigns or is unable to fulfill the term.
- Placing KRS under the Model Procurement Code, so that the agency would operate under the same purchasing guidelines as state government.
- Limiting raises for KRS personnel to the percentage offered in the budget for state employees overall.
- Requiring that all investment holdings and fees by individual KRS investment managers be made public.
- Banning the use of system assets to pay placement agents.
- Ensuring KRS contracts are made publicly available and always presented to the board of trustees, the state Auditor and the General Assembly’s Government Contract Review Committee.
- Streamlining the reporting of investment returns.
Kay, who represents many public employees in his district, said he believes his bill will give lawmakers and the public more insight into the operations of the pension systems while also taking politics out of the equation.
“This bill adopts both Republican and Democratic proposals as a sensible and comprehensive approach to help Kentucky work toward a solution to ensure the pensions are there for those who earned them,” Rep. Kay said. “Beyond that, my bill would also give our state employees, retirees and the public in general greater peace of mind, because they would better know how their contributions and tax dollars are being invested. This system needs less secrecy and more accountability, and my bill provides for both.”