A nonprofit publication of the Kentucky Center for Public Service Journalism

County Employee Retirement System wants better representation over retirement plan

By Tom Latek
Kentucky Today

A bill proposed by the County Employee Retirement System to address their concerns about under-representation on the Kentucky Retirement Systems board cleared a House committee on Monday.

Bryanna Carroll with the Kentucky League of Cities says while CERS has 76 percent of the assets and make up 64 percent of the KRS membership, they only have 35 percent of the seats on the KRS board, 14 percent of the Actuarial Subcommittee and no representation on the Investment Committee.

“CERS is the local pension system for cities, counties, and non-teaching school board employees,” she testified. “The state does not directly appropriate any money to CERS, yet decisions on CERS assets are invested and how the fund is administered are controlled by the Kentucky Retirement System’s Board of Trustees.”

Rep. Russell Webber, R-Shepherdsville and Bryanna Carroll from the Kentucky League of Cities testifying on behalf of the bill. (Photo by Tom Latek, Kentucky Today)

Administrative Office of the Courts employees are also under the County Employees Retirement System.

While CERS has proposed a complete split from KRS in the past, they now advocate a hybrid system, in which the KRS and CERS would have separate boards to administer their own systems. Both entities would be part of a new Kentucky Public Pension Authority which would provide personnel needs and perform other administrative duties agreed upon by the two boards.

Under the proposal, each of the three organizations would have a nine-member board and the new KPPA would have four representatives each from the KRS and CERS.

All three boards would report to the Public Pension Oversight Board, ban the governor from reorganizing, amending or abolishing any board, and would not impact the so-called “inviolable contract” the state has with employees and retirees.

The proposed bill would have the three boards in place by April 1, 2021, with KPPA assuming personnel management by July 1 of that year.

Carroll told the House Local Government Committee that the measure has support from 23 employee and employer groups.

However, Jim Carroll, president of Kentucky Government Retirees, said his 15,500-member group opposes the measure.

“This plan will increase costs for two of the worst-funded pension plans in the country. It will cost an estimated $250,000 to implement,” he said. “Annual costs would be anywhere from $3.5 to $6.7 million, there will be duplicate services, auditors, investment consultants and other services, along with higher fees, because the separate plans will have less purchasing power.”

The bill, sponsored by Rep. Russell Webber, R-Shepherdsville, won unanimous committee approval and now heads to the House floor.

According to figures supplied by Carroll, CERS has 248,969 members, both employees and retirees, KERS has 135,046, and the State Police Retirement System another 2,696.

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