FRANKFORT, Ky. (KT) – Some good news for one of the state’s public pension plans as Kentucky teachers see investments go up.
The Kentucky Teachers Retirement System said Monday pension investments posted a 10.81 percent gain (gross) for the fiscal year that ended on June 30. That exceeds the plan’s assumed 7.5 percent rate of return and is among the top two percent of large pension plans across the country.
The net return was 10.5 percent.
Along with the top two percent performance for the most recent year, TRS’s investments were in the top two percent for the 10-year period, while returns were in the top eight percent for both the three and five-year periods.
All rankings are according to Aon Hewitt Investment Consulting’s analysis of large domestic pension plans with more than $1 billion in assets.
During the fiscal year, TRS benefitted from the second year of additional funding approved by the General Assembly and Gov. Matt Bevin for the 2016-18 biennium, which was the first such appropriations since 2008.
“The additional funding arrived as the economy continued to grow, helping returns on the investments that will provide teachers their pensions in retirement,” said TRS Executive Secretary Gary Harbin. “This year’s results again show TRS’s long-term investment strategy is working, and, with the benefit of the first full funding of the pension in years for the 2018-20 biennium, we look forward to adding to that performance.”
TRS assets for all its funds, which also include medical insurance and life insurance funds, exceeded $20 billion for the first time, due to the market performance for the year.
The results come just days before the Kentucky Supreme Court takes up the constitutionality of public pension reforms enacted by Senate Bill 151.
Attorney General Andy Beshear filed suit against Gov. Matt Bevin after SB 151, which was originally a sewage measure, but was amended to contain provisions of the original pension bill, SB 1, and was approved by a House committee and both houses of the General Assembly in the space of just a few hours.
The suit by Beshear, together with the Kentucky Educational Association and the Kentucky Fraternal Order of Police, was filed against Bevin shortly after the governor signed the measure into law in early April.
In his June ruling declaring SB 151 unconstitutional, Franklin Circuit Judge Phillip Shepherd took issue with the process used to change SB 151 from legislation dealing with sewage to become the public pension reform bill, saying the changed bill did not receive the required three readings on three separate days in each chamber, and that it was appropriations bill, meaning it required 51 votes to pass. The bill only cleared the chamber, 49-46. It easily received the number of votes needed in the Senate.
Bevin appealed the ruling. The Kentucky Supreme Court will hear oral arguments Thursday at 10 a.m., EDT.