By Terry Boyd, includes “Over time, the informed and cautious flourish. The greedy tend to fall prey to the manipulators and predators. Take Kentucky’s public employee pension funds under the Kentucky Retirement Systems, which are some of the most underfunded in the United States. For the last six years, as the General Assembly diverted hundreds of millions in payments away from the funds each year, KRS’s pension investment strategy was generating tens of millions in management fees for Wall Street firms and placement agents. Those fees were were generated as Kentucky invested in risky, opaque startup hedge funds with no track records and other investments that produced yields below what the funds could have earned from lower risk, low fee stocks and bond portfolios. In Kentucky, it was never about yield; it was always about fees. At IL, we’ve been reporting on the state’s public-employee pension crisis since 2012, about a year after we launched our beta site in early 2011. No one much cared. State officials did whatever they could to impugn the reputation of the main pension whistleblower, investment manager Chris Tobe, largely succeeding as major news outlets such as The Courier-Journal ignored the story. Why? Because Tobe’s allegations are potentially explosive, with the U.S. Securities and Exchange Commission’s Division of Enforcement investigating KRS investment practices. Two years later, the media finally is listening to Tobe and his message that Kentucky’s finances will crater within five years. …”

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