The Kentucky Public Pensions Authority (KPPA) held its first meeting Tuesday morning and immediately voted to increase the salaries of two KPPA executives. The board, comprised of four County Employees Retirement System (CERS) board members and four Kentucky Retirement Systems (KRS) board members, elected KRS Board Chairman Keith Peercy as KPPA chair and CERS Board Chairman Betty Pendergrass as vice chair.
KPPA Executive Director David Eager asked the board to set the salaries for newly hired KPPA Chief Investment Officer (CIO) Steven Herbert and Deputy Chief Investment Officer Stephen Willer at a level Eager said was more competitive with the market. Legislators passed House Bill 9 in the 2021 session, a KLC initiative that created separate statutory structures for CERS and the state’s pension systems. The bill also included language requested by KPPA that allows those two positions to receive salaries outside of KRS Chapter 18A.
While CERS Board Vice Chair Jerry Powell voted against the increase, the remaining seven board members agreed. KPPA will increase Herbert’s salary from $169,000 to $235,000, and Willer’s salary from $165,000 to $190,000.
Eager explained that Herbert accepted the job earlier this year with the understanding that the salary would be adjusted once legislators approved the Chapter 18A exception. Eager noted that KPPA salaries for top investment officials were at the bottom of all public pensions KPPA surveyed, with most paying around $300,000. He stated that prior CIOs frequently cited low pay as a reason for leaving the job.
The KRS Board of Trustees meets again April 15, and the CERS Board of Trustees will hold its second meeting on April 21.