Ky. Chamber of Commerce president reiterates pension concerns in letter to lawmakers
02/18/2015 05:58 PM
More than two months after calling for an audit of the Kentucky Retirement Systems, Kentucky Chamber of Commerce President David Adkisson is again calling for lawmakers to fund an extensive performance review of the pension agency in an open letter to legislators Wednesday.
What’s more, Adkisson raised concerns with House Speaker Greg Stumbo’s plan to boost the Kentucky Teachers’ Retirement System’s bottom line through $3.3 billion in bonding.
The proposal, House Bill 4, has its skeptics in the private sector, “especially since taxpayers have not had the benefit of vetting such a major initiative,” Adkisson wrote in the letter.
“Simply put, it is difficult to know whether bonding is a good idea or bad idea,” he wrote. “Furthermore, this discussion focuses solely on the funding side and does not include a comprehensive review of the costs and sustainability of the benefits structure over time.
“For now, it would be imprudent for the business community to support such a proposal without a significant amount of open, public deliberation.”
KTRS officials have said the bonds would prevent a drop in the pension’s funded status and give lawmakers time to craft a long-term financing plan. Stumbo, D-Prestonsburg, has said the legislature should take advantage of low interest rates, particularly given KTRS’s performance in the stock market, while it can.
Adkisson said in his letter that the chamber had asked lawmakers last March to create an interim panel to study funding problems with the teachers’ pension system and look at potential ways to address those issues at KTRS.
Similarly, Adkisson asked state Auditor Adam Edelen to conduct a performance audit at KRS in December, but Edelen said his office would need at least $150,000 and legislative backing for such a wide-ranging review.
“To take on an issue of this magnitude,” Edelen told Pure Politics in January, “we really do need to make sure that we have resources and strong, bipartisan support.”
Adkisson reiterated his request in Wednesday’s letter, which can be viewed here.
“We strongly urge the legislature to fund this independent review by the State Auditor rather than continuing to rely solely on information provided by the system itself,” he wrote.
The chamber further recommended the establishment of a consensus actuarial group, allowing a review of annual retirement contributions recommended by actuaries hired by KRS, and a mechanism so governors can identify how pension contributions are funded.
He also asked lawmakers to back a bevy of pension-related bills, such as pieces targeting pension spiking, allowing agencies to withdraw from KRS and broadening the scope of the Public Pension Oversight Board, as this year’s session nears the halfway mark.
“We strongly encourage your continued diligence and aggressive management of the retirement systems,” Adkisson wrote in the letter. “The importance of addressing these pension issues cannot be overstated, and this session of the General Assembly cannot be considered successful unless we continue making progress in this critical area.”
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