Written by John Cheves of the Herald-Leader
A House committee on Monday approved a bill that could cost millions of dollars a year in order to move Kentucky’s local government pension fund out of the ailing Kentucky Retirement Systems. It’s a longtime goal of city, county and school district leaders who say they want more control over the soaring pension contribution rates set by a 16-member governing board where they only hold three seats.
However, critics told lawmakers the bill would be a boondoggle, pointlessly creating new bureaucracies when a quick reorganization of the existing state pension board could give local governments the stronger voice they seek.
As of last June 30, the primary state government pension fund at KRS that covers 123,027 people was only 13 percent funded. The primary local government pension fund that covers 228,065 people was 49 percent funded — in better shape, but still not healthy.
House Bill 484 would transfer control of the County Employees Retirement System (or CERS) from the $18.4 billion KRS to its own governing board. A smaller KRS board would continue to manage the pension and retiree health insurance funds for state employees and Kentucky State Police.
The two boards each would hire their own chief executive officers but otherwise would share a single staff to manage their daily business, under the control of still another governing board called the Kentucky Public Pensions Authority (KPPA). The CERS and KRS boards would contribute members to sit on the KPPA board. These changes would be effective as of April 1, 2021.
(Cross-posted via the Kentucky Press News Service. Read the rest of the article at the Herald-Leader.)
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