Former head of Kentucky Retirement Systems ‘should be in jail,’ Bevin says

Gov. Matt Bevin told a gathering of Kentucky’s city and county leaders Thursday that the former executive director of the financially ailing Kentucky Retirement Systems deserves to be in jail.

“The former head of KRS, the director who oversaw this is a guy named Bill Thielen,” Bevin said at the Governor’s Local Issues Conference Thursday. “Bill Thielen should be in jail and that’s a fact. And I don’t know who’s here from the media but if this was a private company, if this was a private pension plan he would be.”

Thielen, who wasn’t at the event, said he thought the governor was just playing politics.

“I don’t think the governor knows what he’s talking about,” Thielen said.

Bevin did not take questions from the media following his speech and his office did not immediately reply to a request for more information about why he thinks Thielen should be jailed.

Bevin butted heads with Thielen and stirred controversy with the KRS board last summer when he removed chairman Tommy Elliott. Soon after, he issued an executive order restructuring the retirement systems board, adding more governor-appointed members.

Throughout his speech, Bevin stressed the dire straits of the pension system — one of the worst funded in the country — and wasted no time placing the blame on those who came before him.

“What has been done in our pension systems has been criminal,” Bevin said. “It has been negligent, it has been irresponsible and it is shameful.”

The state’s pension crisis, and how the legislature will attempt to solve it in a promised special legislative session, is a major topic of concern for current and former state and local government employees.

Bevin spoke Thursday to a crowd of local government employees, many of whom will rely on those pensions. Several people in the crowd sported stickers that said “A pension is a promise.”

“If we truly do work together, if we truly want Kentucky to be better, if we truly do put the public interest ahead of our own, we can make a change,” Bevin said. “And this is what I’ve committed to doing. So I’m asking for your confidence that I am applying everything in my ability, and I am, to save this pension system.”

Bevin has posted two videos on Facebook in an attempt to assuage the concerns of public pension holders who are worried lawmakers will attempt to cut their benefits, but he has offered few details on how he plans to fix the system. His speech Thursday did more of the same, asking for confidence in his administration to deal with the problem.

His plea comes as many local leaders have pushed to split the pension plan that serves local government retirees off from KRS. The County Employees Retirement System, which is managed by KRS, has about 59 percent of the funds it is expected to need to pay future benefits, compared to about 14 percent for the primary pension fund for most state workers.

Local officials have said they’re concerned about their representation on the KRS board and a lack of input in pension reform talks. They have started a lobbying campaign to encourage the legislature to separate the systems — even purchasing a billboard in Frankfort that says “#freeCERS.”

Bevin said it was a “very real topic of conversation” that he thought would lead to a “thoughtful resolution,” though he offered few clues about what that resolution might entail.

Bevin said neither system was doing well and that lawmakers would have to make changes.

“There is not a single system, a single pension plan in this state that is well funded or doing well,” Bevin said. “By IRS statutes, if these were private companies they would have been taken over and frozen and disbanded and the payout of benefits would have been stopped by law.”

Mostly he asked for the trust of local government employees and said he was doing the right thing by addressing the problems head-on.

“We have kicked this can and we have kicked this can and we have kicked this can and it is time to stop kicking the can,” Bevin said.

This story was originally published August 24, 2017 at 4:45 PM with the headline "Former head of Kentucky Retirement Systems ‘should be in jail,’ Bevin says."