Beshear praises retirement's systems decision to appeal 'a very dangerous ruling'
06/11/2014 05:34 PM
Calling a bankruptcy judge’s opinion “dangerous” for the Kentucky Retirement System’s future, Gov. Steve Beshear on Tuesday praised the pension fund’s board for voting to appeal the ruling.
Beshear, a former attorney general, said he strongly disagreed with U.S. Bankruptcy Judge Joan Lloyd’s decision last month to allow the mental health center Seven Counties Services to seek bankruptcy protection. He said it could imperil the Kentucky Employee Retirement System if the mental health center is allowed to leave the fund but leave behind its obligation to its retirees for the system to pick up.
Beshear didn’t say it that the decision would drain the pension fund. But he said it would put it at more risk if other mental health agencies and quasi governmental organizations that are part of the Kentucky Retirement System followed suit.
Seven Counties Services’ leaders argued that the mental health agency needed to leave the Kentucky Retirement System because increased contribution rates would amount to about 40 percent of its payroll budget starting in July. The General Assembly did provide $19 million to other mental health agencies — not counting Seven Counties — as part of the budget to help them meet those increased costs.
State Auditor Adam Edelen also said he was glad the issue was getting vetted in the courts but stopped short of saying what he hopes the Appeals Court will do.
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