Turmoil at Kentucky pension agency leads to state police presence

William Thielen, executive director of the Kentucky Retirement Systems, told the state pension fund’s board of trustees Thursday that he will retire effective Sept. 1 after five years in the job.

But that wasn’t the biggest drama at Thursday’s KRS board meeting. Kentucky State Police officers stood inside the meeting room to prevent board member Thomas K. Elliott from sitting at the conference table to participate in the day’s business.

Elliott, a Louisville banker, was re-appointed to another four-year term last year by then-Gov. Steve Beshear. Gov. Matt Bevin issued an executive order removing Elliott from the board last month and appointing Madisonville dermatologist William F. Smith in his place. However, Attorney General Andy Beshear — Steve Beshear’s son — countered on Tuesday with an opinion finding that Bevin was not entitled to do that, and that Smith lacked the professional investment or financial experience legally required for the appointment.

Bevin dismissed Andy Beshear’s opinion as “non-binding” and “politically motivated,” but Smith announced Wednesday that he would decline the appointment.

Kentucky Government Retirees, a group that monitors the $16 billion public pension and insurance funds at KRS, issued a statement after Thursday’s meeting protesting the presence of state police.

“We were shocked and dismayed that a civil dispute over the authority of a Kentucky Retirement Systems trustee to serve became criminalized this morning,” group spokesman Jim Carroll said in a prepared statement. “If it was Gov. Bevin’s decision to deploy state police to forcibly prevent Tommy Elliott from discharging his duties under the guidance of an attorney general’s opinion, then the governor’s actions represent a ruthless and reckless abuse of executive power. Civil disputes are handled in civil courts.”

Bevin spokeswoman Amanda Stamper said in her own statement: “The governor issued a valid executive order removing Mr. Elliott from the KRS board. Mr. Elliott voluntarily elected not to participate in the board meeting this morning. We are ready to move forward with transparency and continue the work of fixing our $35 billion unfunded pension crisis.”

Apart from Elliott, Bevin recently filled two vacant seats on the 13-member board. Six KRS trustees are appointed by the governor, six are elected by public employees, and the state’s personnel secretary holds the final seat.

This seems like a good time to retire, said Thielen, who has overseen day-to-day operations at KRS since April 2011.

“Given all the circumstances, I think it’s best for me and probably best for the agency to have a fresh face representing us at the Capitol,” Thielen said.

This story was originally published May 19, 2016 at 4:44 PM with the headline "Turmoil at Kentucky pension agency leads to state police presence."