Welcome to the latest edition of This Week in Pensions! As we do most weeks, we have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Here are this week’s top stories:
Kentucky Democrats unveil proposals to address surging pension costs by Ryland Barton. Kentucky lawmakers and Governor Bevin have already passed the July 1st deadline that saw contributions to the Kentucky Retirement System (KRS) from quasi-state agencies double. With House Leadership stating that a special session is most likely going to happen next week, Democrats in the legislature decided to roll out two alternative plans. Barton states that “both bills proposed by Democrats would freeze the payments at the lower rate and shift money from the state’s retiree health insurance fund to the pension system for five years.” Along with the contribution freeze, one of the two bills also adopts a more optimistic investment return assumption of 6.25 percent. Currently the Kentucky Retirement System (KRS) has an assumed return of 5.25 percent – one of the lowest in the nation.
New law requires Maryland pension system to disclose millions in fees paid to Wall Street firms by Luke Briadwater. Maryland lawmakers took an extra step in ensuring pension fund investment fees are more transparent. The new law seeks to make sure that all fees paid by the Maryland State Retirement and Pension System (SRPS) to Wall Street banks or advisors are disclosed. According to Braidwater, the SRPS “has reported paying about $370 million annually in fees to the firms that invest its $51 billion in assets. But the real amount of fees paid is anywhere from $460 million to $570 million. That’s because so-called ‘carried interest fees’ – a cut of the Maryland fund’s profits that goes to the outside investment managers – have not been disclosed publicly.” With this new bill, the practice of hiding ‘carried interest fees’ will end.
Be sure to check back next week for the latest news in the fight for a secure retirement!