Kentucky to receive large chunk of federal settlement with Bank of America for pension system
08/21/2014 02:11 PM
The Kentucky Retirement System is set to get $23 million dollars back to make up for losses as part of the largest civic settlement of a single entity in American history. Along with the money to the retirement system, the state will get a portion of $150 million dollars for other services, according to Attorney General Jack Conway.
The U.S. Department of Justice alongside six attorneys general, including Kentucky Attorney General Conway, announced Thursday they had reached a $16.6 billion settlement to resolve federal and state claims against Bank of America.
Of the $16.6 billion settlement, some of that money automatically goes to the Department of Justice and other areas of government for fees.
Next, the money will be split up among the six states involved. Conway told reporters in the press call that Kentucky will get a portion of $150 million that will divided between Kentucky, Maryland and Delaware.
Whatever portion of the $150 million that comes back to the state will distributed over what, Conway said, he believes will be the next 10 years. That money will be spent on things like: principal reduction loan modifications to help homeowners underwater on their mortgages, new loans to credit-worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing.
Hear Conway’s statements in the press call here:
In addition, the Kentucky Retirement System will get the money back that they lost in the investments and then some. The retirement system lost around $21 million due to the investment.
When asked by a reporter whether or not the $23 million in losses represented all of the investments made by the Kentucky Retirement System, Conway said that number was just the losses from Bank of America and the companies it has acquired.
Conway went on to say that the problems in the Kentucky Retirement system will not be solved through cases like this.
“I can’t go out and make Bank of America pay for what the General Assembly has refused to fund over the last 15 or 17 years,” Conway said in the call. “What I can do is if we have suffered security loses because or misrepresentation or fraud, I can go out and recover those loses.”
As for the settlement itself, Conway told reporters on the call that it was a big day for Kentucky since he said the state has not previously been a leader in these types of settlements. Conway added that if the state had not gotten involved in the case, the state would be getting nothing to make up for their loses.
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