September 23, 2019- Public Pension Oversight Board Meeting
KAPE’s Legislative Team attended the Public Pension Oversight Board meeting on Monday, September 23, 2019. At this meeting the results of the audit of KRS and TRS performed by State Auditor Mike Harmon and his staff was presented to the PPOB. Auditor Harmon stated that SB 2, passed in 2017, was a bill meant to provide transparency on state agencies, and his audit revealed that 86% of contracts for investment services of pension funds and other services of KRS were not posted for public viewing. Of the 281 contracts between KRS and others, only 12 were posted, and 269 were not posted. He also stated that KRS has 110 investment managers handling investment funds. TRS has 136 contracts with 41 investment managers, and only 19% of those contracts are posted online for viewing by the public.
Both retirement systems countered that an Attorney General opinion released in 2016, before SB 2 was passed in 2017, gave them protection NOT to post contracts that would reveal information on carried interest, profit sharing, and how the investment managers are paid their fees. TRS General Counsel Beau Barnes stated that TRS does not want competitors having access to the relationship between the System and the investment managers.
The auditor’s report can be found at auditor.ky.gov