Lawmakers are considering changes to the way the agency that manages the state’s $28 billion pension functions.
A special Senate Finance subcommittee on Thursday heard from staff at Funston Advisory Services. The inspector general’s office chose the consulting firm to conduct a fiduciary audit of the state Retirement System Investment Commission.
Senators will use the audit as a starting point for drafting new legislation for the upcoming legislative session, which begins in January.
Staggered term limits are among the changes the committee is considering. Lawmakers may limit commissioners to two, five-year terms. Commissioners currently serve five years and are not term limited.
Senators also discussed shedding their responsibility of setting the pension’s rate of return, currently set at 7.5 percent. But they stopped short of taking the authority out of the hands of lawmakers altogether.
Instead, they debated a setup in which commissioners do analysis and make recommendations to the State Fiscal Accountability Authority, which will take shape in 2015 in the place of the Budget and Control Board.
Another potential major change up for debate is placing the commission in the role of custodian. Currently the treasurer, Curtis Loftis is the sole custodian for the fund. But aspects of this structure invite conflict, said Keith Johnson, an attorney with Funston Advisory Services.
Loftis raised concerns over the high fees the commission pays to Wall St.—$420 million in 2013—and over the level of transparency within the commission.
The commission implemented several accountability measures in response, including reporting all its fees, one measure RSIC staffers say no other known pensions have in place.
Sen. Joel Lourie, D-Columbia, who co-chairs the subcommittee, credited Loftis with bringing several important issues to the forefront.