The past fiscal year was tough for Kentucky Retirement Systems with investments showing a total fund loss of .52 percent of a $14.9 billion dollar system. According to KRS Executive Director William Thielan the group projected positive gains until Brexit hit Europe, affecting an already volatile market.
"KRS is at a standstill" said Thieland, until the Franklin Circuit Court can determine whether or not Governor Matt Bevin had the authority to abolish the current board of trustees, replacing 11 of the 17 existing members.
“Our investment committee is scheduled to meet on the 23rd of this month, there are three investments that are going to be presented to the committee. It’s problematic to the committee, we don’t know if is the authorized group or not, depending on which board is operative,” said Theilan.
Thielan says the ruling by the court will determine the fate of three other boards required to make critical upcoming decisions, like finding his replacement when he retires September 1st. KRS is responsible for providing pensions and retiree health insurance to more than 355,000 Kentuckians.
“Our operations here are very complex. We operate and administer one of the most complex pension systems in the country because not only do we have a numerous set of pension benefits or tiers but we also provide full health insurance as a retirement benefit and there are various tiers there. So it's a complicated and involved process that is not very well understood by many people at all. The whole investment arena is very complex as well, and not very well understood. So we are doing our best to educate people but that’s been a challenging process at times," said Thielan.
A statement releasedby the KRS said final audited financial statements will be available in early December. Preliminary results indicate an overall decline in assets for all plans (pension and insurance).
The Kentucky Employees Retirement System Non-hazardous (KERS Non-Haz) pension plan which has the lowest funded ratio, had an asset decline of approximately $347 million.
