We brought this up way back when (a few months ago) but it’s time to hit it again. First, some background:
- Kentucky Retirement Systems consists of ten separate pension and retiree health plans for three main groups: state employees and retirees (KERS), county and city employees (CERS) and state police (SPRS). CERS is the best-funded of the three main KRS pension programs because cities and counties – primarily because Louisville pays 100% of the actuarially-required contribution while the state pays barely 50% for KERS and SPRS.
- The largest entity of CERS is Jefferson County School Employees (non-teachers). Second is Metro Government, including police and fire. Since Lexington’s system is independent and not part of CERS, it’s safe to assume Louisville/Jefferson County entities make up the majority of CERS in assets. Especially when you include the Louisville Water Company, the fairgrounds, the airport, Metro Sewer District and Seven Counties.
Metro Government, by way of Metro Council, sent Kentucky Retirement Systems a $10 million check without consulting an actuary. This back room deal, brokered by Tommy Elliott and involving Jim King, should be enough to make any thinking person’s eyes roll to the back of their head. Yes, King was directly involved. He told us via email that the payment was being made to KRS so Metro Government/Metro Council could avoid having to pay any legal fees – an insane excuse.
That $10 million was supposed to flow into the firefighters’ accounts at CERS. But. Uh. $5 million disappeared.
KRS staffers, who are part of the nearly-bankrupt KERS, pulled some fancy accounting tricks. $5 million was pulled from CERS (county employees). $4 million was given to KERS and $1 million to the Kentucky State Police. That trick involved shifting $5 million worth of losses from the currency speculator from KERS and SPRS to CERS. We could give you a million stories about the currency speculator but we’ve already been foaming at the mouth about them for, you know, years.
KRS is now claiming that the final hard dollar losses from currency speculation are roughly $54 million (common sense says they’re much greater than that). While the CERS plan is 47% the overall KRS system, the original accounting had them absorbing 54% – or about $29 million – of those currency losses. KRS management, which obviously favors KERS, and the State Police, didn’t think that was enough. So they yanked another $5 million from CERS, dishing those $4 million to KERS and the rest to the po-leece. That left CERS responsible for 64% of the losses – roughly $34 million.
It’s also entirely likely that additional operating costs from the entire KRS are being unfairly attached to CERS. Things like separate legal funds and issues that never come to light. Matters about which we could go on for days.
So here are the big questions:
- Should Metro Government pull out of Kentucky Retirement Systems and form its own fund like Cincinnati, Nashville and St. Louis have done?
- Should Louisville be funding 250 non-merit jobs for the Frankfort good old boy network headed by Greg Fischer’s guy, Tommy Elliott?
- Can Louisville, in addition to its own employees, continue subsidizing the tens of millions of dollars for other plans around the state while folks in Frankfort play fast and loose with their money?
We’ll likely never know. Because people like Jim King turn out to be exactly what they say they aren’t. He continues to claim he’s the opposite of Greg Fischer and wants to work with his constituency. In practice, however, he’s just like Greg: work super-fast to make problems disappear/prevent them from making it into the mainstream. When it comes to major issues like Metro Animal Services shenanigans, he worked hard do the wrong thing. When it comes to deals with the KRS, it seems he’s also taking the easy route out while playing with the very people he claims to detest.