Kentucky Retirement Systems to appeal Seven Counties bankruptcy decision
06/11/2014 12:29 PM
FRANKFORT — The Kentucky Retirement Systems Board of Trustees unanimously voted to seek an appeal of last month’s federal bankruptcy judge’s ruling that would allow the non-profit Seven Counties Services to pull out of the public employees’ pension fund.
A judge ruled in the end of May the mental health center in the Louisville region could get bankruptcy protection, thus, allowing the agency to exit the Kentucky Employees Retirement System and leave the costs of the center’s retirees behind for the pension fund to cover. Seven Counties’ leaders argued that the center couldn’t afford the rising retirement contribution rates, which would eat up 40 percent of the payroll budget starting next month.
But the retirement system isn’t going to let Seven Counties leave without another round of court fights.
The 12 members of the retirement system’s board of trustees met for three hours Wednesday behind closed doors to discuss the appeal in an emergency meeting.
“I think the board felt that there were good legal practical reasons in terms of protecting the solvency of the trust ultimately and the rights of members to decide to appeal the decision,” said Bill Thielen, the executive director of the Kentucky Retirement System.
The decision from the federal judge marked the first time a participant in the system was granted leave from their obligations — which legislators have feared could lead to mad dash of other quasi-governmental agencies seeking to leave the system.
The system’s leaders estimate Seven Counties’ obligations that would be left in the system could cost about $90 million.
Jim Carroll, a former communications director for the state parks department, is one of the retired state employees who closely monitor the pension system. He and his wife, also a retired state worker, created a Facebook page — Kentucky Government Reitrees — to keep an eye on the pension system.
Carroll, who attended Wednesday’s meeting, applauded the decision to appeal the bankruptcy ruling in a statement sent to Pure Politics.
“We are gratified that the KRS board has decided to appeal the Seven Counties Services bankruptcy ruling. As stakeholders, we are pleased that the board had moved to protect the long-term viability of the financially troubled KERS non-hazardous fund,” Carroll said.
The board of trustees consists of 13 members with two elected KERS members, three elected by CERS members, one elected by SPRS members, the Secretary of the State Personnel Cabinet and six appointees selected by the governor.
Thomas Elliott is the Chair and governor appointee. Elliot serves as the Senior Vice President of Old National Bank, Louisville.
Dr. Daniel Bauer serves as the vice-chair and was selected by the governor. Bauer serves as the dean of the Rubel School, and teaches MBA courses at Bellarmine University.
Former Rep. Mike Cherry, (D) Princeton, and is a governor appointee to the board. Cherry is the former chair of the House State Government Committee and 2012 chair of the public pension task force.
Edwin Davis is a County Employees Retirement System elected member of the board. Davis is a former board member and former Jefferson County Police Sergeant.
J.T Fulkerson is a governor appointee to the board of trustees, he is former finance officer for the city of Owensboro. Fulkerson also served with the Kentucky League of Cities as member of their insurance board.
Joesph Hardesty is a governor appointee, and member of the law firm Stites and Harbison with an emphasis in representing clients in construction and business disputes.
Vince Lang is a Kentucky Employees Retirement System elected member of the board. Lang serves as an Executive Director of the Kentucky Association of County Judge Executives, and is the former commissioner of the property valuation department within the Kentucky Revenue Cabinet.
Tim Longmeyer is the Personnel Cabinet Secretary and serves as a ex-officio trustee.
Randy Overstreet is a State Police Retirement System elected trustee. Overstreet retired from the state police in 1999 after serving as post commander of the Elizabethtown post for seven years.
Mary Helen Peter serves as a Kentucky Employees Retirement System elected member. Peter is retired from the Cabinet for Community Based Services.
David Rich serves as a County Employees Retirement System elected member and retired Louisville firefighter. _
Randy Stevens is a governor appointee to the board of trustees representing the Kentucky Association of Counties. Stevens currently works as the District Manager for the Trimble Water District #1.
William Summers serves as a County Employees Retirement System elected member and retired from Louisville Metro Government in 2011 where he served as deputy mayor.
Below the Fold
Subscribe and get the latest political intelligence delivered to your inbox.