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Mark Hebert
June 2008
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Report Shows KRS And KTRS Underperforming Other Pension Systems

9:57 PM Thu, Jun 12, 2008 |
Mark Hebert

A report from the Legislative Program Review and Investigations Committee has found the investments made by Kentucky's two largest public pension systems are underperforming similar retirement systems in other states.

The report was released today. It found the Kentucky Retirement System and Kentucky Teachers' Retirement System have investment rates of return below the average returns on investments in 22 similar systems. The CEO's of both pension systems told lawmakers that they've been hamstrung by cash flow problems and a past ban on foreign investments. Here's the story I did Thursday.



1 Comments

Pension said:

I find this article particularly unnerving in the fact our General Assembly may be heading into a Special Session for the purpose of altering the retirement pension system as early as next week. As usual, Kentucky's government is reactive and not proactive. This article is another indication that there is a systemic problem with the pension systems. It is beyond a reasonable mind to think that the General Assembly's choice to tweak a couple of areas within the system at this time is a worthwhile endeavor. LRC's report mentioned in this article touches a major problem with the systems - weak investments that are not in line with other state's rates. The General Assembly in its race for change is merely shuffling cost from one area to another and is creating a burdensome social economic downfall for the state as a whole. For example, legislation that reduces retirees' COLA to 1.5 percent is counterproductive and regressive. It might be surprising to note that KERS reports that the average annual pension for a non-hazardous retiree is a mere $20,120, with the average age of that recipient being 66. A 1.5 percent COLA provides that retiree with 317 more dollars on the year. Reducing this groups' income when inflation is growing at unwelcoming rates is destructive and placing these citizens under financial burden. Legislation that shifts CERS costs to the statewide KERS is not resolving anything financially. It merely places the burden on the state and relieves the county financial burden which is nothing more than robbing Peter to pay Paul. It would seem the press is in a situation to stop this train from wrecking and should use its medium to inform the public about the real facts. With knowledge, one would hope our democratic society could pressure the Governor and members of the General Assembly into doing the right thing.


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