Fort Wright, Which Filed Suit, Applauds Passage of State Pension Legislation
The City of Fort Wright said in a news release that the adoption of House Bill 484 represents "a major victory".
The city filed a class-action lawsuit in 2014 against the board of trustees of the Kentucky Retirement Systems (KRS), seeking restitution and an accounting for what the city alleged were improper investments by the board of assets in the County Employee Retirement Systems (CERS).
That suit is currently before the Kentucky Supreme Court, pending a motion for discretionary review.
House Bill 484 creates an independent CERS board of trustees to manage investment decisions, actuarial data, and auditing and asset allocations for the local pension system of which cities like Ft. Wright are a part.
The bill was adopted by the General Assembly and signed into law by Governor Andy Beshear.
In a news release, the City of Fort Wright stated that it believes the legislation will lead to greater accountability of investment of CERS assets.
The City of Fort Wright has seen significant increases in pension expenditures each fiscal year, and in 2017-18 recognized actuarial pension expenses of $595,203 in addition to its $378,377 pension contribution. In 2018-19, those amounts escalated to recognized actuarial pension expenses of $732,940 in addition to its $428,209 pension contribution which was a 13 percent increase.
The recognized actuarial pension is a liability we are required to carry on our books by the state, the city has no other long-term liabilities.
Pension costs for the next fiscal year, which begins July 1, are anticipated to be an estimated $821,211.61 or 16.48 percent of the city's general fund budget, and under the current KRS board of trustees, the city was projected to increase its amount by 12 percent annually.
By 2024-25, pension costs are projected to skyrocket to $1,102,426.99, which equates to 22.12% of our the city's general fund.
The purpose of separating CERS from KERS is to ensure the system remains free of political influence, regardless of future administrations, and we would like to express our sincere appreciation to the Kentucky Legislature, especially Senator Chris McDaniel and Representative Kim Banta, for taking the necessary actions to free CERS and hopefully return some stability to the CERS System, a news release said.
The passage of HB 484, while certainly a legislative victory in regards to Fort Wright's case, only resolves a portion of the city's claims surrounding the ongoing class action litigation, and the City of Fort Wright continues the pursuit of other non-resolved matters affiliated with the lawsuit.