Rep. Kay prefiles transparency bill for Kentucky Retirement System
LRC press release
FRANKFORT - Looking to better insulate Kentucky Retirement Systems (KRS) from politics while making the agency more publicly accountable, state Rep. James Kay pre-filed legislation today that would block future gubernatorial re-organizations of its board of trustees, lift secrecy on investments and limit the size of any future raises that KRS leaders receive.
"We need to take the politics out of our public pensions and make them more transparent," said Rep. Kay of Versailles, whose district includes many state government employees and retirees in Kentucky. "If enacted, this bill will allow the public and lawmakers more open access to understand investments and fees while maintaining the fiduciary independence of the board. This board should be governed by law, not by a political tug-of-war."
The provisions of Rep. Kay's bill, which will be considered during the 2017 Regular Session, include:
o Not allowing gubernatorial re-organization of the board of trustees at any time;
o 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.
o Authorizing other elected trustees to fill the vacancy of another elected member, if that member resigns or is unable to fulfill the term.
o Placing KRS under the Model Procurement Code, so that the agency would operate under the same purchasing guidelines as state government.
o Limiting raises for KRS personnel to the percentage offered in the budget for state employees overall.
o Requiring that all investment holdings and fees by individual KRS investment managers be made public.
o Banning the use of system assets to pay placement agents.
o 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.
o Streamlining the reporting of investment returns.
"I've worked on this issue since I was elected, and 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."