State lawmakers are calling for more transparency in how the state’s largest pension fund invests its money into secretive hedge funds and private equity.
Pension Oversight Committee co-chair Sen. Joe Bowen, a Republican from Owensboro, pressed KRS’ investment officer David Peden over the lack of transparency of its investments, saying, " If statute required it, this would have to become transparent. So using that scenario are you saying to us that these current consultants, managers that we got would go away?"
Kentucky's legislative leaders have passed two bills to shore up the state's underfunded pension systems, effectively staving off a special session on the issue.
The new plan would reduce a personal tax credit of $20 to $10, generating roughly 33 million in revenue that would go to General Fund, but lawmakers would use for pensions. It would also use revenue from technical changes in the state's tax code, as well as money from federal tax changes.
Overall, the plan would generate $96 million in the 2015 fiscal year and $100 million in 2016 fiscal year.
In a news conference with legislative leaders after the bill passed, Governor Steve Beshear said the process will work as a template for other states.
"This is a good solution to a thorny problem. A solution that other states around the country will be looking at as they look at options to solve their own crises," Beshear said.
State leaders are still working to find solutions to the Kentucky's troubled pension system —but he's not promising a deal the time the General Assembly regular session ends next week, Gov. Steve Beshear said on Monday.
Beshear has mediated sessions between House and Senate leadership on reforming the pension systems and how to fund them, after the chambers came to an impasse on the issue.
Those conversations have continued since the General Assembly adjourned last week for the veto period, but Beshear said he can't predict whether legislators will strike a deal before the 2013 session ends.
"One can never predict what will happen in the end, particularly in a legislative session but I feel good about where we are right now," Beshear said.
If lawmakers can't reach a deal, a special session to deal with the issue is likely.
A Warren County lawmaker says he feels good about the chances of a pension reform measure being finalized by the end of the legislative session. Republican Representative Jim DeCesare told WKU Public Radio he doesn’t think there are many differences remaining between the two parties.
“It was my understanding that when we left there both sides weren’t that far apart," said the Rockfield lawmaker. "We just have some details to work out on three or four main issues. And the hope is that they can come to some sort of a conclusion and some kind of result that everybody can live with.”
DeCesare said pension reform is “without a doubt” the single most important issue lawmakers need to hammer out before the session ends. A bill passed by the Republican-led Senate creates 401-K like retirement plan for new government workers, while a House-passed bill would use money raised from the lottery and horse tracks to fund the state’s pension contributions.
Most Kentucky lawmakers are back home for the next week-and-a-half, while some conferees remain at the state capitol trying to work out differences between the House and Senate. All lawmakers will return to Frankfort March 25-26 for the final two days of the regular session.
Two priorities of Kentucky lawmakers will spill over to the so-called veto period of the 2013 legislative sessions after the issues could not be resolved by the end of Tuesday.
Legislators were unable to compromise on pension reform and the military electronic voting bill before both legislative chambers adjourned until March 25.
Legislative leaders said talks on pension reforms are still progressing and that a conference committee has been set up to find a compromise on the military voting bill. Earlier Tuesday, Gov. Steve Beshear said a special session appeared more likely because the General Assembly appeared to lack agreement on reforms to the state's underfunded pension system.
House Speaker Greg Stumbo, a Democrat, said the talks on pension reform have been encouraging despite the lack of a deal before legislators adjourned Tuesday.
With no deal and time running out, a special session is becoming more likely for Kentucky lawmakers to reform the underfunded pension programs for state employees, Gov. Steve Beshear said on Tuesday.
It's unlikely that the General Assembly will address pension reform before legislators leave Frankfort after Tuesday for a brief period called the veto break, Beshear said. Legislators have
Two pensions bills aimed at reforming Kentucky's underfunded pension system havebeen locked in a stalemate between both chambers of the state legislature, with both refusing to accept a bill based on procedural technicalities.
While legislative leaders have met routinely since last week on the pension issue, Beshear said they are still far apart—meaning a special session is becoming more likely.
With time running short, several key bills, including one to increase Kentucky's high school dropout age to 18, still were pending in the Legislature heading into the weekend.
The odds grow longer with each passing day as lawmakers and the Governor negotiate.
Gov. Steve Beshear told reporters Friday that he hopes compromise legislation on the dropout bill will become law in time.
He said a bipartisan proposal is being crafted that would allow school boards to vote on increasing the age in their districts. After 55 percent of school districts raise the age, the remaining districts will have to follow suit during the next four years.
Gov. Steve Beshear has concluded a meeting with a bipartisan group of legislative leaders without breaking an impasse on pension reform legislation.
The Democratic-controlled House and Republican-led Senate have been at loggerheads on how to shore up the financially troubled pension plans for state and local government retirees.
House Speaker Greg Stumbo called the Friday morning meeting a first step. He's said everyone involved wants to resolve the issue now to avoid the cost of a special legislative session later.
Among the major sticking points: A Senate proposal to create a 401(k)-like retirement plan for new employees and a House proposal to use money from the lottery and horse tracks to boost the state's yearly pension contribution.
Kentucky House and Senate leaders have changed the schedule of this year's legislative session to avoid a special session.
A potential—and costly—special session has loomed over the General Assembly in recent days, as lawmakers continued work on pension reform. Instead of convening Friday, lawmakers will work on Tuesday, with hopes that talks started Thursday night could lead to an agreement on pension reform by then.
House Speaker Greg Stumbo says those talks have included the Governor and Senate leaders.
"The only conversation that we've had with them has obviously revolved around pensions, funding of pension liabilities and just a brief conversation about redistricting," he says.
A Kentucky House bill aiming to help generate revenues for the underfunded pension system is in legal limbo as the Senate refused to accept the bill.
House Bill 416 takes revenues from expansion of Instant Racing and online lottery sales and the start of a Keno game to generate close to $100 million a year to pay into state's currently underfunded pensions for state employees.
Revenue bills in odd-year sessions must have 60 House votes in final passage to be considered within the rules; House Bill 416 only received 52 on the floor. Because of that, the Senate clerk refused to accept the bill.
But House Speaker Greg Stumbo says the Senate should amend the bill and send it back to the House for final passage if it wants to avoid a special session.