A recent survey on investment costs and returns placed Kentucky Retirement Systems in the top 25% of those surveyed. The survey was conducted by Cost Effectiveness Measurement, Inc. (CEM), a private research firm located in Toronto, Ontario.
According to the survey results, the Kentucky Retirement Systems' investments added value in the amount of $9.6 million. At the same time the Systems' operating costs were $12 million less than costs for similar sized funds.
The term "value added" refers to the difference between actual investment return and the benchmark returns set in the Investment Policy. Actual investment returns exceeded the policy returns by $9.6 million in 1996.
Total operating costs considered in the survey included all investment related expenses, including management costs, asset related governance, administration costs and direct investment management costs. Compared to the operating costs for pension funds of similar size and asset allocation, the Kentucky Retirement Systems' operating costs are $12 million lower than the average cost.
The savings in operating costs can be attributed to the low number of investment managers and the high levels of both internal and passive portfolio management. The investment policies and asset allocations are determined by the Board of Trustees.
The fact that Kentucky Retirement Systems' performance ranked in the top 25% of the Trust Universe Comparison Service while operating costs were well below average indicates that the Systems' investment administration is very efficient and cost-effective.
At their August meeting, the Board of Trustees selected the following individuals to appear on the ballot for the 1998 KERS trustee election:
Eddie Adams, Frankfort. He is currently employed as a Transportation Engineer Supervisor with the Kentucky Transportation Cabinet.
Robert Adams, Louisville. He retired from the position of Executive Director of Kentucky Housing Corporation.
Gene Drake, Frankfort. He is a current member of the Board of Trustees, and he is retired from the position of engineer with the Transportation Cabinet.
Bobby Henson, Frankfort. He retired from the position of Executive Director, Office of Policy and Budget, Kentucky Transportation Cabinet.
Susan Smith Horne, Versailles. She is currently Assistant Fayette County Attorney.
Gil McCarty, Frankfort. He retired from the position of Commissioner of the Department of Insurance.
Ballots will be mailed in January and must be returned by February 28, 1998.
Kentucky Retirement Systems is now matching addresses with the National Change of Address file maintained by the U.S. Post Office.
When you change your address at the post office, the retirement office will obtain your new address from their file within 2-4 weeks.
The only time you will need to send in a written change of address to the retirement office is when you need something from us quickly, such as your monthly benefit check.
| PERIOD | STOCKS | BONDS | REAL ESTATE | SHORT TERM | TOTAL PORTFOLIO |
|---|---|---|---|---|---|
| 1-YEAR | 33.6% | 7.6% | 4.5% | 5.5% | 24.2% |
| 5-YEAR | 19.9% | 6.9% | 2.5% | 4.8% | 14.5% |
| PENSION FUND | INSURANCE FUND | |||
|---|---|---|---|---|
| 1996 | 1997 | 1996 | 1997 | |
| KERS | 98.8% | 100% | 14.1% | 16.6% |
| CERS | 100% | 100% | 12.1% | 13.3% |
| SPRS | 97.1% | 100% | 27.5% | 28.9% |
Last Updated: 7/01/2002