Kentucky leaders sued for teachers' pension woes
LOUISVILLE, Ky. (AP) — Worried about irreparable damage being done to their retirement benefits, a group of public school teachers on Tuesday asked a judge to order Kentucky's top political leaders to "perform their constitutional and statutory duties" by adequately funding the pension system.
The plaintiffs — a group of current and retired teachers — filed the lawsuit in Franklin County Circuit Court in Frankfort.
Named as defendants are Gov. Matt Bevin, Kentucky Senate President Robert Stivers and outgoing House Speaker Greg Stumbo.
The legal salvo came a day after an oversight panel was told Kentucky's troubled pension systems continued their downward slide in 2016, with plans covering teachers and state employees losing more than $1.8 billion in value while obligations are increasing.
According to the lawsuit, prior governors and legislatures failed to adequately fund the Kentucky Teachers' Retirement System, resulting in an unfunded liability exceeding $24.4 billion by mid-2015. The pension system had less than 42 cents on hand for every dollar of pension benefits it owed to its members, the suit said. The pension system's condition has become "more dire, onerous and impaired" since then, it said.
Chronic underfunding of the pension system violates the state and federal constitutions and Kentucky law, the suit said.
As a result, it said, plaintiffs are threatened with "irreparable injury to their retirement benefits as a result of the contractual breach."
"Defendants should be directed to perform their constitutional and statutory duties to adequately fund KTRS to an actuarially and financially sound and healthy status," the suit said.
Bevin spokeswoman Amanda Stamper said repairing the state's troubled pension systems, both for teachers and state workers, has been the Republican governor's top priority since taking office late last year.
"The Bevin administration is intent on fixing the country's worst funded pension system," Stamper said. "Kentucky taxpayers, retirees and current employees deserve nothing less."
The Kentucky Teachers' Retirement System lost nearly $1.2 billion during the fiscal year, the pension oversight panel was told Monday during its review of the past year. But General Counsel Beau Barnes told the Public Pension Oversight Board that the system will benefit greatly from the $973 million the Legislature voted to give the system earlier this year.
On Tuesday, KTRS executive secretary Gary Harbin said his organization was not involved in the suit "in any way, shape or form."
"We got almost all the funding we requested, and we're extremely appreciative of the governor and the legislature for what they've done," he said in a phone interview.