BY MICHON LINDSTROM KENTUCKY
FRANKFORT, Ky. – The transparency of Kentucky’s Retirement systems were the topic of the Public Pension Oversight Committee Monday.
State auditor Mike Harmon presented his findings of a special investigation into the systems to the committee.
Last month, the Republican-released a report saying Kentucky Retirement Systems and Teachers’ Retirement System were not complying with new transparency laws created in 2017 with the passage of Senate Bill 2.
The report found about 80% of investment contracts were not listed, and many contracts posted had information redacted that was not in accordance with the Open Records Act.
Harmon told the committee it’s important for the systems to follow the new law.
“KRS, TRS, and JFRS owe it to the employees as well as to the taxpayers of Kentucky to strive towards openness and transparency,” Harmon told committee members.
Representatives from KRS and TRS were present where they refuted the findings of the audit while discussing the negative impact the audit could have.
“KRS has to gain the trust of legislators, the public, and the media we have serious funding problems, and I connect the funding problems to the audit,” David Eager, Executive Director of KRS told committee members. “If we lose the confidence of you all, and the legislators, and the general public we are going to be hard pressed to get the funding we need.”
KRS officials say much of the information that is redacted from contracts in ORR is not to hide investment information but to protect it from competitors.
“From the managers I’ve spoken to, I don’t think any of them have an issue with the public knowing what is in their contracts, their issue is with their competitors knowing what is in their contracts,” said Rich Robben, Executive Director, Office of Investments KRS. “I think it behooves us to step back and understand that many people in this room have unfettered access to the unredacted document in order to protect the public’s interest.”
Beau Barnes, Deputy Executive Secretary and General Counsel for TRS, says while he agrees many contracts are not found online, the amount of money they are linked to is small.
“While it’s technically true that 81 percent of our contracts are not on the website that represents only 11 percent of assets under management,” Barnes said. “A much smaller dollar figure is represented by those contracts.”