The Public Pension Oversight Board (PPOB) sent four legislative recommendations to the General Assembly. They include a level 1 full-scope actuarial audit request of the state pension systems. Monday’s actions come after months of meetings to investigate issues during the interim session.
PPOB Co-Chair Senator Jimmy Higdon (R-Lebanon) said the General Assembly should ensure sufficient revenue is available to fully fund the actuarially determined contribution (ADC) in the upcoming budget.
Legislative Research Commission (LRC) Senior Legislative Committee Analyst Jennifer Hans testified that a study of potential audits found a level 1 full-scope audit would likely cost between $150,000 and $250,000 and take six months to complete. The study also found sufficient firms capable of conducting the work.
Higdon’s second recommendation was for Judicial Form Retirement System (JFRS) housekeeping measures PPOB discussed in November, including technical cleanup of Kentucky Revised Statute Chapter 6 and 21, clarifying the budget process for administrative expenses, and revising the unfunded liability amortization policy.
Representative Jerry Miller (R-Louisville) recommended legislation similar to his prefiled bill addressing pension spiking. BR 40 would exempt from current anti-spiking provisions overtime pay directly attributable to a local government emergency in which the governor calls in the Kentucky National Guard. The Kentucky League of Cities Board of Directors voted to support Miller’s bill.
Miller also recommended legislation that would require an actuarial investigation every two years of economic assumptions for the County Employees Retirement System (CERS), Kentucky Retirement Systems (KRS), JFRS, and Kentucky Teachers’ Retirement System (KTRS). The systems currently review assumptions every five years. The KLC Board of Directors voted to support that measure, filed as BR 341.
The 2022 legislative session begins on January 4.