A bill to bring more transparency and oversight to the state’s retirement systems passed out of the Senate after passing through committee and a floor vote unanimously Wednesday.
The legislation, sponsored by Public Pension Oversight Board co-chair Sen. Joe Bowen, would bring more transparency and oversight to the state’s retirement systems by making changes to board structures including gubernatorial appointments and requiring the systems to follow KRS Chapter 45A, the model procurement code, with a new compromise made with the systems that exempts their investment contracts.
Other changes to the three retirement systems, Kentucky Retirement System (KRS), Kentucky Teachers’ Retirement System (KTRS) and the Judicial Retirement System, include:
- Disclosure of fees and contracts
- Added levels of investment experience requirements to serve on the boards of the systems
- Prohibiting the use of placement agents by the systems
- Confirmation of appointments by the Senate
- Uniform methods of reporting and disclosing investment fees
- Expanding legislative membership on the Public Pension Oversight Board
Bowen noted that Senate Bill 2 has changed slightly since it was introduced in the 2016 session but did not see passage through the then-Democratically controlled House.
The retirement systems, Bowen said, were brought to the table in discussions on the transparency bill which resulted in what the Senator feels is a stronger bill.
In a speech on the Senate floor about the bill Wednesday, Bowen said Senate Bill 2 is not meant to attack the systems but instead to bring light to the critical situation faced by Kentucky with the pension crisis.
The Kentucky Chamber is a strong supporter of Senate Bill 2 and other legislation to bring more transparency and accountability to the pension systems as the state seeks to solve the issues of the woefully underfunded systems.
Senate Bill 2 now moves to the House to be heard in committee and then receive a vote on the floor.