Once audits of the state’s ailing pension systems are completed by the end of the year, there could be time to work up legislation to make structural changes to the pension systems during the 2017 General Assembly, but pension transparency shouldn’t be made into a political football ahead of the next session, according to state Sen. Joe Bowen.
Bowen, the chair of the Senate State Government Committee and co-chair of the Public Pension Oversight Board, told the Kentucky Chamber Monday that the audits are about to get underway after Gov. Matt Bevin announced The PFM Group has been selected as the firm to conduct the comprehensive reviews of the pension systems and he plans to be in touch with that firm about what he would like to see reviewed.
He also stated that he believes there will be time for legislation to be introduced in the 2017 session to make structural changes after legislators review the audit reports, which are due December 31, 2016.
“I think the whole purpose of audits is to identify what public policies we need to bring forward to correct the issues,” Bowen said (in the video below). “We can make things happen pretty quickly. We will just have to buckle down and roll our sleeves up and get going with the issue. But yeah, I think there is always time.”
Also in the news recently, Frankfort-area state Rep. James Kay has pre-filed a pension transparency bill for the 2017 session that has many similarities to a bill pushed by Sen. Bowen last session and also prohibits gubernatorial re-organizations of the boards after Gov. Bevin’s recent changes to the Kentucky Retirement System (KRS) Board of Trustees through executive order.
In an interview with The Bottom Line, Bowen implied that Kay’s pre-filed pension bill is a political tool during the election season because people want to see the pension crisis dealt with. Bowen also pointed to his pension transparency bill, Senate Bill 2, not being called by House Democrats during the 2016 session.
“There was no lack of opportunities for people to support transparency issues in the last session,” Bowen said. “But now, I guess they have had a change of heart.”
Bowen went on to say he is glad people like Rep. Kay are looking at transparency as an important issue but again stated his disappointment that his transparency bill was not supported last session, when he believes it was the right time to address the problem.
“[Rep. James Kay’s] bill is a lesser version, if you will, than mine. It doesn’t have a lot of the requirements that my bill had. So we will see. You know, we will file another transparency bill and we will see which one the General Assembly supports, we will see which one the public actually supports” Bowen said.
When asked if the filing of a pension transparency bill by a House Democrat and one by a Senate Republican opens the door for compromise on such legislation, Bowen noted the version of his pension transparency bill introduced in the final days of the 2016 session and said there had already been the chance to compromise.
Bowen added that he plans to file very similar language to last session’s Senate Bill 2 in the 2017 session and “if we need to compromise, we may crack the door open a little bit.”
Bowen also discussed the recent news about the “questionable investments” of the KRS Board and investment team (at 2:30 in the video below) and said his bill would address some of those issues.
In terms of other pension legislation Bowen plans to file next session, Bowen said he believes there is “cause for concern” in terms of how the pension plans are combined and lumped together and that he is working on language to potentially break up some of the systems and not “put them all in one basket.”
Watch the interview segment with Bowen on Rep. Kay’s pension bill, concerns over investment experience on the pension boards and other legislation he wants to see in the 2017 session here: