Kentucky Senate | Pension360

The Kentucky Senate has rejected a bill that sought to issue $3.3 billion in bonds to help ease the funding shortfall of the Kentucky Teachers’ Retirement system (KTRS).

The bill passed the House late last month, but was stopped short in the Senate on Monday.

Some lawmakers cited the risk of the bonds as a reason for the bill’s rejection; the success of the plan depended on the system’s investment returns exceeding the interest on the issued bonds.

If that were to happen, KTRS could pocket the difference and funding will improve. But if investment returns lag, the pension-funding situation would worsen further.

Senators amended the bill to call for the creation of a task force to examine the pension system and recommend funding solutions.

More on the new bill, from the State-Journal:

The substitute adopted in the Senate Standing Committee on State and Local Government instead directs the Legislative Research Commission to create a Kentucky Teachers’ Retirement System task force to study and make recommendations for funding and stabilizing the retirement system.

The task force will include:

* Six members of the Senate with four appointed by the Senate president, two appointed by the Senate minority floor leader;

* Six members of the House with four appointed by the House speaker, two appointed by the House minority floor leader;

* The House speaker and Senate president will each appoint one co-chair from their chambers;

* The task force will have monthly meetings during the interim and report its findings to the LRC for referral to a committee by Dec. 18, 2015.

The bill is officially called House Bill 4.

A bill is moving forward in the Kentucky House that would increase the transparency around investments made by the state’s retirement systems.

The Senate unanimously passed the measure last month.

The bill would require the state’s pension funds to disclose the use of placement agents, any fees paid to those agents, and more. An official summary of the bill from Legiscan:

[The bill] require[s] the Judicial Retirement Plan, the Legislators’ Retirement Plan, the Kentucky Retirement Systems, and the Kentucky Teachers’ Retirement System to establish by reference in administrative regulation a placement agent disclosure policy; require the policy to disclose, at a minimum, to the boards of trustees of the plans and systems the name of the placement agent, dollar value of investment, and the fees or payments made to placement agent for each investment in which a placement agent was utilized; define placement agent; require the plans and systems to submit a quarterly update of the information disclosed to the respective boards of trustees to the Government Contract Review Committee; provide that the disclosure shall apply to contracts established or renewed on or after July 1, 2015.

The Senator sponsoring the bill, Chris McDaniel [R], told the State-Journal:

“The fact of the matter is there is nothing that forces them to disclose this to the General Assembly right now and by extension the public,” McDaniel said. “It’s important people know where money is and isn’t placed, the kinds of returns we are getting and to really force that.

“This will require that they do these things. It’s a bill that public employees want to see pass. It’s a bill transparency advocates want to see pass be it conservative, liberal or otherwise. People want to know how their tax dollars are being spent. I’m optimistic the House will pick it up.”

The bill is called Senate Bill 22.

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Tag: Kentucky Senate

Kentucky Pension Bond Bill Rejected, Amended in Senate

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