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Governor Steve Beshear's Communications Office
Governor Beshear signs bill to protect Kentucky Retirement Systems investments
FRANKFORT, Ky. – Gov. Steve Beshear today signed into law House Bill 146, sponsored by Rep. Mike Cherry, which will ensure the expertise of the Kentucky Retirement Systems (KRS) board members appointed by the Governor and will provide additional investment protection measures to maximize every dollar that comes into the system while protecting the KRS plan’s assets.
“In order for the KRS board to protect the savings of retiree contributions, they must have the necessary tools and knowledge to fulfill their fiduciary obligations to maintain the trust of its investors and the public,” said Gov. Beshear. “This bill, along with the work of the Kentucky Public Pension Working Group I established in 2008, is intended to insulate both taxpayers and retirees, and protect the KRS plan’s assets.”
To increase the probability of successfully meeting the plan’s long-term investment goals, the bill limits the amount of assets managed by a single external investment manager to no more than 15 percent of the systems’ portfolio.
“Passage of this legislation is an important part of our overall Pension Reform Plan starting with the Reform Act of 2008,” said Rep. Mike Cherry, of Princeton. “It keeps Kentucky in the forefront among states seeking to stabilize and protect retirement funds and it serves as a reminder to our employees, both active and retired, that we are committed to doing whatever is required to protect their retirement.”
The board of trustees of the KRS is composed of nine members, three of which are appointed by the Governor. HB 146 mandates that two of the three gubernatorial appointees have at least 10 years of investment experiences in one of the following areas: a portfolio manager acting in a fiduciary capacity; a professional securities analyst or investment consultant; a current or retired employee or principal of a trust institution, investment or finance organization, or endowment fund acting in an investment-related capacity; a chartered financial analyst in good standing as determined by the Chartered Financial Analyst (CFA) Institute; a university professor, teaching economics or investment-related studies; or any other professional with exceptional experience in the field of public or private finances.
HB 146 also clarifies that the County Employees Retirement System, Kentucky Employees Retirement System and State Police Retirement System shall be administered by the board of trustees of KRS.
On May 29, 2008, Gov. Beshear signed an executive order creating the Kentucky Public Pension Working Group. The working group established six subcommittees to study investments; securities litigation; the County Employees Retirement System reorganization; state funding of the retirement systems; health care; and defined contributions.
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