TRS is accountable to its members
Since TRS is independently managed, the fiduciary responsibility of the retirement system remains exclusively accountable to the system’s members. TRS is administered by an 11-member Board of Trustees, of which a seven are elected by TRS members. The Kentucky Education Commissioner and State Treasurer serve as board members, and the Governor appoints two members who must have investment experience.
The legislative and executive branches of Kentucky already have established oversight
The General Assembly established the Public Pension Oversight Board (PPOB) in 2013 to review, analyze, and provide oversight of Kentucky’s three primary retirement systems, including TRS. The PPOB can compel any one of Kentucky’s pension funds to disclose its activities and can make recommendations to the Legislature on laws governing the systems. This board consists of members appointed by the Speaker of the House, President of the Senate, Senate Minority Floor Leader, House Minority Floor Leader, State Budget Director, Auditor, Attorney General, and by the Governor.
TRS is recognized nationally for its investment performance and administration
Changing the board structure and losing independence could result in the same issues that has plagued Kentucky’s other retirement systems.
While TRS has enjoyed best-in-class investment returns and has been recognized for its administrative management, the Kentucky Retirement System (KRS), which has a 17-member board of trustees dominated by 11 gubernatorial appointments, has been subject to politics, questionable investments, kickbacks, and numerous scandals. Changing the board’s current structure and eliminating TRS’ independence could result in decisions that are subject to political agendas, self-interest, and poor management. Worse, changing the board structure would mean less accountability to current and future members.