Kentucky Budget Bill Gives $1 Billion Boost to Pensions; Transparency Bill Fails

There were several pension-related items of interest that developed in the final days of Kentucky’s legislative session.

First, lawmakers passed a budget that would infuse an extra $1.2 billion in contributions to the state pension systems over the next two years.

From Pensions & Investments:

Under the bill, the $17 billion Kentucky Teachers’ Retirement System, Frankfort, would receive an additional $498.54 million in fiscal year 2017 and $474.72 million in fiscal year 2018. The $11 billion Kentucky Retirement Systems, Frankfort, would receive an additional $98.19 million and $87.57 million in each of those periods, respectively.

The bill includes a $125 million permanent fund to help shore up the pension funds. Funding would come from a surplus in the state’s public employee health insurance fund. Gov. Matt Bevin previously proposed a $500 million permanent fund, a repository that would help fund future pension costs.

Additionally, House lawmakers failed to pass a controversial, sweeping pension transparency bill that would have disclosed investment contracts and lawmaker pension amounts. The bill was passed by the Senate last month.

Details from WFPL:

The bill would have revealed how much and to whom the pension systems pay to invest pension funds. Kentucky law exempts the investments from open records laws.

Last fall, the Kentucky Retirement Systems Board of Trustees reported that its annual investment expenses are running 75 percent higher than reported in previous years.

Chris Tobe, a former Kentucky Retirement Systems trustee who has been critical of the system, said investment managers should compete to manage Kentucky’s pension assets in public view.

“We need to have open contracts and some kind of documentation and bidding process. Secret backroom deals is not good government,” he said.

[…]

On the last day of the legislative session, Senate leaders attempted to revive the bill by lumping it with language from an Area Development District oversight bill that the House favored, and also taking out some of the controversial provisions. But the bill still languished in the House.