The Kentucky Public Pensions Authority (KPPA), County Employees Retirement System (CERS), and Kentucky Retirement Systems (KRS) Joint Audit Committee met on Tuesday to consider employer allocation audits, review financial reports, and elect leadership.
Committee members approved the draft Governmental Accounting Standards Board (GASB) Statements 68 and 75 proportionate share audits prepared by Blue and Company. These accounting standards require CERS participating employers to book their cost-sharing portion of the net pension liability on their financial statements. The figures do not impact how much cities owe or will pay into the system based on employer contribution rates.
Senior Consultant Danny White reported on employer allocation schedules: “Some will see a big change from prior to this year because of House Bill 8, of how the contribution is allocated and what they pay, but I think it will be much more stable going forward. The dollar may go up or down depending on what the unfunded liability does, but the relative proportionate share should be stable from year to year.”
Deputy Executive Director Rebecca Adkins said KPPA would put the draft findings online knowing that employers are anxious to see the report; however, she noted that both the CERS and KRS boards must approve the allocations before KPPA can vote. She said that should happen at the KPPA meeting on June 16.
Click here to view the meeting agenda that includes the draft audit findings.
Auditors said the need to monitor potential legislative changes delayed this year’s report. They hope to get back on schedule to have the information prepared in February for next year’s audit. Auditors offered a clean or unmodified opinion with the FY 2021 audit report.
The committee also reviewed the fiduciary net position of the pension funds through the first three quarters of Fiscal Year 2022. Adkins reported that CERS Hazardous is up $33 million, and CERS Nonhazardous is up $26 million from the same period in Fiscal Year 2021.
KPPA Executive Director David Eager reminded audit committee members that recent market downturns impacted the positive figures for the quarter ending March 31. “Unless we get a real big rebound in June, it’s going to look a lot more negative than it does on March 31,” Eager cautioned.
Additionally, the CERS/KRS Joint Audit Committee elected its leadership. CERS board member Bill O’Mara will serve as chair, while KRS board member Lynn Hampton will continue as vice chair.