The executive secretary of the Kansas Public Employee Retirement System, Marshall Crowther, Lawrence, shouldn't be made a scapegoat for financial problems in the system, a KPERS trustee said today.
Neva Entrikin, Lawrence, a Kansas University employee and the only state classified worker on the KPERS board of trustees, said Crowther told her privately he resigned to take heat off the board.
A special legislative panel, headed by Sen. Wint Winter Jr., R-Lawrence, has been investigating for two months recent KPERS losses and the system's investment practices. Losses may exceed $100 million.
"I hope he won't be made a scapegoat," Entrikin said of Crowther. "He was not responsible for investments."
THE BOARD of trustees, appointed by the governor, is responsible for setting policy for the pension system, said Entrikin, office superviser in KU's art history department and a KPERS board member for the past four years.
The KPERS executive secretary is responsible for carrying out the board's decisions, she said.
"I am sorry that Marshall felt he had to resign," Entrikin said. "His knowledge and contribution to KPERS was of inestimatable value. He will be very difficult to replace."
Gov. Joan Finney recently appointed herself to the KPERS board and called for the board to consider whether Crowther should be fired. Finney also wanted to know how much involvement Crowther had in bad KPERS investments.
"In talking with him the last few days, he made it clear that he was not resigning to take blame. He was resigning because the focus had been placed on him. He wanted to take the focus off him," Entrikin said.
Entrikin said she had not detected a loss of confidence in the management of the $4.4 billion KPERS fund. She has yet to receive a single telephone call from someone complaining about investment strategies.
SHE ALSO wanted to clarify published accounts that have said $65 million was lost through an investment in a savings institution that failed. Before the failure, KPERS received $29 million from that investment.
"So it's easy to say that $65 million is gone, but it's simply not true. There was a return. I'd like to set that straight. That's not to say the losses are insignificant. They are serious," Entrikin.
She said that in her opinion the KPERS portfolio should be based on a conservative investment strategy and the board should severely limit investments in risky businesses in the future.
Crowther wasn't available for comment this morning.