How to buy and sell Kentucky pension shares
A Kentucky pension plan may soon allow investors to buy, sell and manage their pension funds, but the legislation is not set to become law until next year.
The bill, introduced last week by Sen. Ron Edwards, R-Fayetteville, would provide investors the option of selling Kentucky’s $1.1 trillion pension fund’s assets and reinvesting the proceeds into private-sector businesses.
The bill would allow investors with more than $5 million to own a percentage of Kentucky’s public pension funds.
Its main supporters in the Kentucky legislature, though, are Kentucky’s largest public pension companies, who hope the bill will create a “stable and sustainable retirement market” for the state’s nearly 5 million retirees.
The Kentucky Retirement System Board, the state pension system’s overseer, said the legislation would help protect Kentucky’s retirement system from financial instability and the threat of a massive tax increase.
“Our pension systems are a vital pillar of Kentucky and the state has a wealth of experience with the challenges that pension plans can face in the current financial climate,” board President Kevin Cottrell said in a statement.
“As we move forward, we will carefully consider the impact on the pension systems of this legislation and will consider the best way to implement it.”
The bill also would allow the state to transfer any excess funds into private companies.
Private companies in Kentucky currently hold more than half of the state�s pension funds and receive more than 70 percent of the money collected from Kentucky taxpayers.
However, the Kentucky Pension System Board says that, with the state already under a financial emergency and under an additional state takeover, it is essential to ensure that private companies and individuals can manage their assets responsibly.
Edwards said he will work with the Kentucky State Board of Investment to craft a state pension plan that meets the needs of Kentucky�s future population.
Currently, Kentucky has 1.3 million retirees, many of whom live in rural areas and rely on the state for financial assistance.
But Edwards and other lawmakers say the state should have more money to invest.
In addition to helping keep the state financially afloat, Edwards said the bill would help save the state $2.4 billion annually by reducing the cost of public pensions by $150 million.
A similar legislation was introduced in January, but that bill never made it to a floor vote.