Should the Kentucky Retirement Systems pay the legal fees of its former chairman who is challenging Gov. Matt Bevin’s unilateral decision to abolish and recreate the board?
KRS and the retirees who depend upon it have a vital interest in knowing who is responsible for overseeing the system: the governor or an independent board.
It will be up to a court to decide the issue and it’s reasonable for KRS to pay attorneys to assure the question is competently and thoroughly argued.
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Like many of Bevin’s targets, KRS has serious problems, some of them self-imposed. We agree with him that management has been too secretive about everything from employee salaries to investment management fees.
However, Bevin is dead wrong in trying to lay the systems’ enormous financial shortfall purely or even primarily at the feet of management.
That’s the direct result of underfunding by two decades of Republican and Democratic governors and legislators. They balanced the budget and funded their favorite projects by shortchanging the pension funds.
Bevin made it clear he won’t continue that irresponsible approach when he proposed a bare-bones budget for the rest of state government in order to divert funds into the pension systems. He also deserves credit for backing legislative efforts to improve transparency that failed to pass.
But he stopped short of proposing new taxes or eliminating tax breaks to create new revenue to plug the $30 billion hole in the pension systems.
Instead, after the session, with a stroke of his executive pen, Bevin abolished the KRS board and reformed it to give himself control.
The governor expanded the board by four members, removed some appointed by former Gov. Steve Beshear, including chairman Thomas K. Elliott, even though their terms had not expired, and replaced them with his own appointees as well.
In the end, Bevin gave himself the authority to appoint 11 of the 17 members of his new board. The other six will continue to be elected independently by public employees and retirees.
“The governor has granted himself extraordinary new powers over a board that is supposed to be insulated from political interference,” Jim Carroll, a spokesman for the retirees’ watchdog group, Kentucky Government Retirees, said. The group urged the “legitimate board” to go to court to oppose Bevin’s action.
The deposed Elliott and board member Mary Helen Peter — one of the independently elected trustees — filed a lawsuit contending that Bevin does not have the authority to remove Elliott. KRS has agreed to pay $50,000 of their attorney’s fees in that case.
Democratic Attorney General Andy Beshear, son of the former governor, has asked to join in the challenge to Bevin’s action while Republican State Treasurer Allison Ball has asked to join the case to challenge the $50,000 payment.
Until Franklin Circuit Judge Philip Shepherd rules on this case, it won’t be clear which board is legitimate under the law.
What is clear is that Bevin has created a huge, unnecessary controversy that’s diverting attention from the very real problems at KRS.
Without doubt, it would be better if the $50,000 going to defend Elliott’s place on the board remained in the struggling trust fund to pay retirement benefits. But Bevin picked this fight, leaving KRS management few choices but to turn to the courts to determine who is in charge.