Missouri pension board toughens ethics policy

Thursday, November 6, 2008 | 7:11 p.m. CST

KANSAS CITY — No more free gasoline and other perks will be allowed for executives of the Missouri teachers retirement system after tougher ethics rules were added last month.

Changes were made after The Kansas City Star reported last month that top executives with the Missouri Public School and Education Employee Retirement Systems were spending taxpayer dollars on such things as stays at luxury hotels.

The Star also found that some retirement system executives openly accepted gifts, meals and travel from investment companies that they're in charge of hiring and firing. Top executives also were given free gas to drive company cars with which they logged more personal mileage than business.

"Recent media coverage has called into question some of the PSRS/PEERS' administrative practices," said board Chairwoman Tina Zubeck. "While we strongly believe the coverage mischaracterized what the systems do, systems' staff and board members won't accept even a hint of impropriety."

The board unanimously approved new rules Oct. 27 at a meeting in Jefferson City that eliminated free gas and banned board members and employees from accepting gifts worth more than $50.

The new policies also require retirement system board members and management staff to file disclosure statements with the Missouri Ethics Commission. Other public retirement systems have similar requirements.

The disclosure forms require the reporting of lodging or travel paid by a third party, gifts worth more than $200 and substantial ownership interests or involvement in a business that could create a conflict of interest with the retirement fund's investments.

Previously, board members weren't prohibited from accepting gifts or required to disclose them.

The changes also included the creation of a subcommittee charged with reviewing the system's travel reimbursement policies. The Star had reported that the system had no limits on travel expenses and that some officials had stayed at posh hotels when they traveled.

The system includes employees in the state's public school districts — except Kansas City and St. Louis, which have their own retirement systems — and most public community colleges. The system has about $27 billion in assets and more than 200,000 members.

So far, the changes have received positive reviews.

"They're taking some positive steps," said Jim Kreider, executive director of the Missouri Retired Teachers Association, which represents more than 15,000 retired educators. "I don't know if it's enough yet, but it sure is a good step or two."

The Missouri National Education Association also praised the tougher ethics rules.

"It appears that they've listened," said DeeAnn Aull, the group's public relations director. "These are steps in the right direction to address the issues that were raised."

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