After being heavily criticized for their use, Kentucky’s major pension program says it hasn't used a placement agent for three years.
Placement agents are investing middle men that direct pension funds to investment opportunities. Kentucky has not had a good track record with placement agents, who have been accused of mismanaging millions for the pension funds according to a 2011 audit.
At a legislative hearing Thursday, the system’s Chief Investment Officer T.J. Carlson said the fund hasn’t used any agents since 2009. But he added that the difference between using agents and not using them is slim.
“There is no indication that there’s any correlation between the use of a placement agent and either the fees that you’re getting or in the performance you’re getting from those,” he said.
Lawmakers were happy the pension systems are no longer using placement agents. But agents aren’t banned in Kentucky and the system could still use them if they are reported properly.
The use of agents and their mismanagement was the main focus of a 2011 audit of the retirement systems.