The County Employees Retirement System (CERS) Board of Trustees met Wednesday to discuss a recently released annual actuarial valuation and an audit jointly conducted with the Kentucky Retirement Systems (KRS).
The board approved the actuarially recommended employer contribution rates for Fiscal Year 2023 that GRS presented in November. The rate will drop for CERS nonhazardous employers to 26.79% ‒ a 0.16 percentage-point decrease. The rate for CERS hazardous employers will be 49.59% ‒ a 5.26 percentage-point increase from FY 2022.
The new rates do not include a 12% year-over-year increase included in the phase-in bill legislators passed in 2018. While the KLC initiative capped any rate increases over a ten year period, it took only half that time to see a decrease in contribution rates. During the November meeting, GRS Senior Consultant Danny White said he anticipates employer contribution rates will continue to decrease in future years.
For the first time since separation, KPPA is poised to approve an annual independent audit. Tuesday, the joint CERS/KRS Audit Committee met to examine work conducted by Blue and Company of Lexington. The examination focused on KPPA financial statements for the year that ended June 30, 2021.
The committee’s discussions primarily focused on language and structure. They recommended several additions designed to bring clarity or context to differentiate CERS information from past reports. CERS Board Chair Betty Pendergrass, who also serves as KPPA co-chair, told CERS trustees that the report is a “draft” and needs technical changes.
“What we’re doing is authorizing the issuance of this report,” she said. “We’re not really issuing an opinion up or down or a yes or no on the content of the report because we want to maintain the independence of our external auditors. The report itself is actually prepared by the KPPA staff, which is management in this particular scenario.”
Auditors reported no significant difficulties conducting the audit, and no management disagreements arose.
CERS trustees voted to move forward with the audit, which KPPA is expected to approve at its December 8 meeting.