Legislation that would make the Kentucky Retirement Systems transparent for those paying its bills has danced into the spotlight during the 2014 session of the Kentucky General Assembly.
Passage of transparency bills filed by Sen. Chris McDaniel, R-Latonia, and Rep. Robert Benvenuti, R-Lexington, would make the “names, status, projected or actual benefit payments” subject to our commonwealth’s superlative Open Records Act.
Such information has been cloaked in secrecy since 1972, when the legislature enacted KRS 61.661 during Gov. Wendell Ford’s administration.
Rep. Brent Yonts, D-Greenville, believes that’s exactly where it should lie.
“I think they’ll rest comfortably on the House side,” Yonts said when asked about the reception pension transparency bills likely would receive in his House State Government Committee.
It was like watching a Ping-Pong match while listening to recent comments on “Pure Politics” by Yonts’ colleague Rep. Jim Wayne, D-Louisville, concerning public pension transparency.
On the one hand, Wayne is right with his House Bill 546, which widens the ban on Kentucky Retirement Systems’ use of placement agents – middlemen who make critical decisions regarding how and where public pension funds are invested (often with firms or hedge funds for whom they work) – and requires KRS to post online the amount of fees it pays to investment firms.
In stating his case for shining a bright light on fund investments, Wayne actually offers a persuasive statement in favor of widening transparency to cover the entire system: “There are a lot of things about the retirement system that have accumulated through the decades that make it difficult to access information. What this legislation does is merely say: ‘Let’s open everything up; let’s make it transparent.’ There are too many retirees and current workers that are dependent upon the proper functioning of this organization or these organizations and we want to make sure that they’re functioning well and that everything is absolutely transparent.”
Why, then, would Wayne follow Yonts’ kneejerk reaction by turning around and opposing Benvenuti’s and Daniel’s proposal? Do Wayne and Yonts believe that public retirees have a greater claim to transparency than the taxpayers who fund their pensions?
In a phone call from Frankfort, Yonts told me that he doesn’t think transparency should apply to public retirees’ pension information any more than it should to retirement payments received by private sector workers.
“It all comes from the government – both Social Security and public retirees’ checks are issued by the government,” he said. “Besides, it’s all private information; everybody doesn’t need to know everything about what’s going on in everyone’s life.”
But McDaniel and Benvenuti don’t suggest anything even close to making known “everything about what’s going on” in public-pensioners’ lives.
They simply propose letting taxpayers know how their tax dollars are spent related to public pensions – including those of politicians and judges, too many of whom are experts at milking the system by collecting six- or even seven-figure legislative retirement checks while also double- or even triple-dipping. This, they believe, moves Kentucky toward addressing an economic crisis that threatens to crowd out funding for every other vital service in the commonwealth.
Even during this pension policy Ping-Pong match, Wayne stops returning serves long enough to support a possible compromise: transparency for pensions above a certain monetary threshold.
Some lawmakers told me they likely would support such an idea and thought many of their colleagues would also be open to the idea.
I, too, think there could be great interest on the part of all Kentuckians – including state retirees, most of whom make very modest pensions – in knowing which senators-turned-judges, Attorney-General-turned-House-Speaker or legislator-turned-Agriculture-Commissioner stand to collect lavish pensions, courtesy of taxpayers in a small, poor and economically struggling state.
Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at email@example.com. Read previously published columns at www.bipps.org.