Tuesday, February 2, 2016

Senate passes public pension reform bill

A bill that would make state retirement systems’ transactions more transparent, hold the systems accountable when contracting out services and require that pension trustees have actual investment experience passed the state Senate by a unanimous vote today.

The “pension reorganization legislation,” given the designation of Senate Bill 2, was the result of the two years’ worth of work by the Public Pension Oversight Board that meets monthly, said Sen. Joe Bowen, R-Owensboro, who introduced the legislation and also co-chairs the oversight board.

“In addition to being a transparency bill, this bill is particularly about the ability of our legislature to be proactive rather than reactive,” said Bowen. “It is about our ability to react on pensions rather than have to react on your pension challenges.”

Kentucky’s burgeoning pension challenge has emerged as a marque issue facing lawmakers during the 2016 General Assembly. The governor’s proposed budget is based on extracting savings on cuts from other government services in order to help stabilize public retirement systems that have billions of dollars in outstanding obligations.

Details of SB 2 include a provision that would make gubernatorial appointed trustees to the retirement systems subject to Senate confirmation. In addition, the systems’ executive directors would be subject to Senate confirmation.

The transparency provisions in the SB 2 would require the systems disclose all fees for each fund it administers as well as most contracts for services, goods or property utilized for the systems.

The measure now goes to the House of Representatives for consideration.