Pension transparency bill passes Senate committee
01/27/2016 07:04 PM
FRANKFORT – A bill which would make the state’s public pension systems more transparent in their transactions unanimously passed in the Senate State and Local Government Committee on Wednesday.
Senate Bill 2, sponsored by Sen. Joe Bowen, R-Owensboro, would also hold the public pension systems more accountable in how they contract with third parties for services, and ensure that their governing boards have the investment experience necessary to lead the organizations effectively.
Senate Bill 2 includes a provision calling for six gubernatorial appointed trustees of the Kentucky Retirement System who would be subject to Senate confirmation. In addition, the KRS executive-director would be subject to Senate confirmation.
Other transparency provisions in the bill calls for KRS to disclose all fees for each fund administered by the board as well as all contracts for services, goods, or property utilized for the systems.
The bill also adds six Kentucky Teachers’ Retirement System trustees including two with investment experience. The trustees would serve for a 4-year term and no more than three consecutive terms.
In addition, it includes many of the same disclosure provisions which apply to KRS.
Bowen said that bill is the result of two years worth of work by the Public Pension Oversight Board and is about transparency in government, subdivisions of the government, and things that are funded by the government.
“It’s about our ability to act on pensions rather than have to react on our pension challenges,” Bowen said. “It’s about having a better course section on our pension boards.”
Bill Thielen, executive director of KRS since 2011, expressed concern about how the resulting legislation could affect his agency negatively.
“It has potential to cause significant disruption in our board decision making processes and in our operations,” Thielen said. “It will impose additional administrative costs.”
Sen. Julie Raque Adams told Thielen that she felt that he should work with the committee rather oppose the legislation since the pension fund is not seeing the results that are desired.
“We are in a hole right now and it is incumbent upon us to be creative and proactive as to how we solve this pension crisis that we now find ourselves,” Raque Adams said. “I would hope that we would have cooperation from the other side to work with us for these creative approaches.”
Senate President Robert Stivers, R-Manchester, feels that the bill will pass the full Senate early next week.
“It’s something I think you even heard the Speaker talk of last night when we were is discussion about having full and total transparency of all the retirement systems,” Stivers said. “It will be something that will be readily and universally supported here in the Senate and has a good likelihood of passing in the House”
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