The Kentucky Chamber of Commerce wants a full performance audit of the troubled Kentucky Retirement Systems.
Chamber President Dave Adkisson Thursday called on state Auditor Adam Edelen to look into KRS, which is rated as one of the most underfunded pension plans in the nation, with only about 45-percent of the assets needed to cover its retirement obligations.
Adkisson said his group is especially concerned about the burden placed on the actuary who advises the system.
“The assumptions they make lead to KRS recommendations, and a request for money that goes to the Governor,” Adkisson said during a conference call with reporters.
“The Governor has to utilize that information to build his budget that goes to the legislature, and all of this is predicated on the assumptions of one actuary. And KTRS, the teachers’ retirement system, uses the same actuary.”
Adkisson says a KRS audit should also look into the amount of investment fees paid by the system, and how that compares to other states. An estimated 30-percent of KRS investments are held in hedge funds and private equity funds, which charge high fees and whose holdings KRS agrees not to reveal.
“We would want to find out what other states are doing, and the specific rationale by which certain fees would be disclosed either by asset class, or by individual agent.”
Louisville Representative Jim Wayne has called for a change in state law that would make public all contract details involving KRS.
Auditor Edelen issued a statement Thursday saying that a performance audit would require “broad, bipartisan support”, as well as “additional resources” for his office.
“We appreciate and share the Kentucky Chamber's concerns about the Kentucky Retirement Systems,” Edelen said in the statement. “At least three major reviews of the public pension system have been conducted in recent years, including one by this office.”
The statement said no decision has been made on whether to pursue another KRS audit.
