FRANKFORT, Ky. (KT) - The State Auditor’s office released a report on Monday that shows the Teachers Retirement System improved its net financial situation over the past few years.
The audited financial statements reflect that TRS’ combined fiduciary net position for the period audits increased by $615.4 million, from $21.3 billion in fiscal year 2018 to $21.9 billion in Fiscal Year 2019. In fiscal year 2017, the combined net position for TRS was $19.8 billion.
The audit report also highlights a 2% increase in the fiduciary net position of the Retirement Annuity Trust ($20.4 billion in Fiscal Year 2019, compared to $20 billion in Fiscal Year 2018), which is attributed to increased employer contributions from Kentucky along with improved market conditions.
In addition, the Health Insurance Trust’s fiduciary net position was up nearly 19 percent in Fiscal Year 2019, or $1.4 billion, compared to $1.2 billion in Fiscal Year 2018. The audit report notes the change is due to investment income and contributions from members and employers.
One negative in the report was that the net fiduciary position for the plan was at 58.8 percent at the end of fiscal year 2019 (June 30), compared to 59.3 percent at the end of the 2018 fiscal year.
“This audit of the Teachers’ Retirement System is important because it enables taxpayers, educators, and policymakers to be aware of how the system has performed and have confidence in the information presented in its financial statements,” said State Auditor Mike Harmon. “Our report contains no findings, but it comes on the heels of our recent special examination of Kentucky’s public pension systems, including TRS, and their compliance with Senate Bill 2’s transparency requirements.”
In that report, Harmon said both the TRS and the Kentucky Retirement System, “failed to follow the spirit of transparency that was intended by the General Assembly.”
One of the basic tenets of the law, according to Harmon, was public posting of contracts.
“KRS and TRS have fallen drastically short of what is required by the law,” he said. “They have also provided my office with inconsistent data, that has heightened our concerns about transparency.”
Harmon says 86 percent of KRS investment contracts had not been posted publicly as required by the law, as of Aug. 13, 2019, and that it’s a similar story with TRS. As of July 24, 2019, 81 percent of TRS investment contracts were not posted to their public website.