Kentucky Retirement Agency Fires Executive Director And Replaces Board Chairman.
State pension agency fires executive director, elects new board chairman
By John Cheves
Stung by recent controversies, the Kentucky Retirement Systems on Thursday fired its executive director and replaced its longtime board chairman.
"The majority of us thought it was time for a change," said Christopher Tobe, a member of the KRS board of trustees.
Tobe cited pending inquiries into KRS' business activities by the U.S. Securities and Exchange Commission and State Auditor Crit Luallen. Also, Attorney General Jack Conway ruled this week that KRS violated the Kentucky Open Records Act by refusing to divulge staff salaries to a state retiree who requested them.
"It's just the overall sense that there's too much stuff going on here, and we need to go in a different direction," Tobe said.
KRS oversees about $13 billion in assets to provide benefits for state and county government retirees.
The KRS board meeting started Thursday by seating a new member, Louisville banker Thomas Elliott, who was appointed by Gov. Steve Beshear to replace W. Lewis Reynolds III, an appointee of former Gov. Ernie Fletcher.
That shifted the power on the nine-member board in favor of a group of self-styled reformers, who have complained for months about the way KRS does business.
Last year, for example, the dissident board members criticized $15 million in fees paid to "placement agents," the well-connected middlemen who help private investment companies sell their products to KRS. The fees are paid by the investment companies, who then are paid by KRS.
With its new member, the board voted 5-3 to replace Chairman Randy Overstreet, a retired state police officer, with Louisville attorney Jennifer Elliott. Overstreet will keep his board seat. It later voted 5-4 to fire Robert Michael Burnside, who had been KRS executive director since 2007.
Burnside did not return a call seeking comment Thursday. He previously served as Fletcher's Finance and Administration Cabinet secretary.
Jennifer Elliott said the board reacted to overall concerns about how KRS was managed, not any one event.
"I can state publicly that our decision was not meant in any way to be a reflection on the integrity of Mr. Burnside," she said.
In October, responding to some issues raised in public, Luallen said her office would examine the KRS board, employees, business conduct, purchases, ethics policies, and the adequacy of its audits and financial reports. The SEC also has opened an "informal inquiry" into KRS, although that appears limited to the use of placement agents.
Burnside's actions in recent months have irritated some board members.
In February, he privately told state lawmakers in Frankfort that "it might be wise" to drop or delay parts of a bill aimed at reforming KRS, including a ban on placement agents and term limits for board members. The bill ultimately failed.
Several board members at the time said they supported the original bill and did not authorize Burnside to lobby against it on the agency's behalf.
This week, board member Robert Wilcher said the board wasn't told that KRS refused to disclose the size of staff salaries until after the open records case had gone to the attorney general. Board members don't know what KRS executives are paid, Wilcher said.
To resolve the open records matter, the KRS board voted Thursday that staff salaries must be posted online for the public to review, Elliott said.
The new chairwoman said she'll assemble an ad hoc committee in coming days to begin a national search for Burnside's replacement. In the interim, KRS chief operations officer William Thielen will hold the top job, she said.
Senate State and Local Government Chairman Damon Thayer, R-Georgetown, said Thursday evening that he had been traveling and just learned of the KRS leadership changes, so he had little to say.
"I can tell you that Mike Burnside is a constituent of mine and I've always found him to be very forthright and responsive when we're looking for information," Thayer said.
Thayer backed a plan during the 2011 General Assembly that would have ended guaranteed pensions for new state and local government employees to resolve the pension funds' growing, multibillion-dollar liability. Instead, new employees could have enrolled in private accounts much like a 401(k).
The measure died in the House, but it prompted a fresh round of debate last winter about the pension funds' liabilities and who is to blame. Burnside, testifying before legislative committees, said the state has failed for years to contribute as much money as KRS' actuaries recommend.
Read more: http://www.kentucky.com/2011/04/08/1700493/state-pension-agency-fires-executive.html#ixzz1IwD5dwfW
By John Cheves
Stung by recent controversies, the Kentucky Retirement Systems on Thursday fired its executive director and replaced its longtime board chairman.
"The majority of us thought it was time for a change," said Christopher Tobe, a member of the KRS board of trustees.
Tobe cited pending inquiries into KRS' business activities by the U.S. Securities and Exchange Commission and State Auditor Crit Luallen. Also, Attorney General Jack Conway ruled this week that KRS violated the Kentucky Open Records Act by refusing to divulge staff salaries to a state retiree who requested them.
"It's just the overall sense that there's too much stuff going on here, and we need to go in a different direction," Tobe said.
KRS oversees about $13 billion in assets to provide benefits for state and county government retirees.
The KRS board meeting started Thursday by seating a new member, Louisville banker Thomas Elliott, who was appointed by Gov. Steve Beshear to replace W. Lewis Reynolds III, an appointee of former Gov. Ernie Fletcher.
That shifted the power on the nine-member board in favor of a group of self-styled reformers, who have complained for months about the way KRS does business.
Last year, for example, the dissident board members criticized $15 million in fees paid to "placement agents," the well-connected middlemen who help private investment companies sell their products to KRS. The fees are paid by the investment companies, who then are paid by KRS.
With its new member, the board voted 5-3 to replace Chairman Randy Overstreet, a retired state police officer, with Louisville attorney Jennifer Elliott. Overstreet will keep his board seat. It later voted 5-4 to fire Robert Michael Burnside, who had been KRS executive director since 2007.
Burnside did not return a call seeking comment Thursday. He previously served as Fletcher's Finance and Administration Cabinet secretary.
Jennifer Elliott said the board reacted to overall concerns about how KRS was managed, not any one event.
"I can state publicly that our decision was not meant in any way to be a reflection on the integrity of Mr. Burnside," she said.
In October, responding to some issues raised in public, Luallen said her office would examine the KRS board, employees, business conduct, purchases, ethics policies, and the adequacy of its audits and financial reports. The SEC also has opened an "informal inquiry" into KRS, although that appears limited to the use of placement agents.
Burnside's actions in recent months have irritated some board members.
In February, he privately told state lawmakers in Frankfort that "it might be wise" to drop or delay parts of a bill aimed at reforming KRS, including a ban on placement agents and term limits for board members. The bill ultimately failed.
Several board members at the time said they supported the original bill and did not authorize Burnside to lobby against it on the agency's behalf.
This week, board member Robert Wilcher said the board wasn't told that KRS refused to disclose the size of staff salaries until after the open records case had gone to the attorney general. Board members don't know what KRS executives are paid, Wilcher said.
To resolve the open records matter, the KRS board voted Thursday that staff salaries must be posted online for the public to review, Elliott said.
The new chairwoman said she'll assemble an ad hoc committee in coming days to begin a national search for Burnside's replacement. In the interim, KRS chief operations officer William Thielen will hold the top job, she said.
Senate State and Local Government Chairman Damon Thayer, R-Georgetown, said Thursday evening that he had been traveling and just learned of the KRS leadership changes, so he had little to say.
"I can tell you that Mike Burnside is a constituent of mine and I've always found him to be very forthright and responsive when we're looking for information," Thayer said.
Thayer backed a plan during the 2011 General Assembly that would have ended guaranteed pensions for new state and local government employees to resolve the pension funds' growing, multibillion-dollar liability. Instead, new employees could have enrolled in private accounts much like a 401(k).
The measure died in the House, but it prompted a fresh round of debate last winter about the pension funds' liabilities and who is to blame. Burnside, testifying before legislative committees, said the state has failed for years to contribute as much money as KRS' actuaries recommend.
Read more: http://www.kentucky.com/2011/04/08/1700493/state-pension-agency-fires-executive.html#ixzz1IwD5dwfW
Labels: Keeping them honest, Politics
posted by KYJurisDoctor at 10:26 AM
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