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Beshear wants Luallen to audit state pensions

By John Cheves on Steve Beshear

 By John Cheves - jcheves@herald-leader.com Gov. Steve Beshear wants State Auditor Crit Luallen to scrutinize investment practices at the Kentucky Retirement Systems. In a letter this week to KRS Board Chairman Randy Overstreet, Beshear suggested an outside audit to delve into the nearly $13 million in fees paid since 2004 to "placement agents," the middlemen who bring private investment deals to the KRS, a public agency that provides benefits to state and county retirees. The KRS released an internal audit of placement agents on Aug. 12 that disclosed the names of placement agents and their fees but identified no serious problems. The agents' fees are paid by investment companies, not the KRS, although the KRS then pays management fees to the companies to cover their expenses. The KRS Board of Trustees voted last week to reopen the audit and return it to a board committee for further review, in part because several trustees complained that they were unaware of the large sums collected by placement agents until the audit essentially was finished.