Kentucky spends $1.2 million fighting Seven Counties over pensio - WDRB 41 Louisville News

Kentucky spends $1.2 million fighting Seven Counties over pensions

Posted: Updated:
LOUISVILLE, Ky. (WDRB) -- Kentucky taxpayers have spent about $1.2 million on an unsuccessful effort to keep Louisville’s Seven Counties Services from fleeing the state’s underfunded pension system.

On Friday, U.S. Bankruptcy Judge Joan A. Lloyd ruled the Louisville-based mental health agency can ditch the pension system and its rapidly escalating costs through the bankruptcy process.

Kentucky Retirement Systems, which oversees the main pension plan for state workers, wanted the court to force Seven Counties to keep paying into the system.

KRS executive director Bill Thielen said it’s too soon to say whether the state will appeal Lloyd’s ruling – which would mean more legal expenses. Thielen said Monday that KRS has incurred“approximately" $1.2 million in legal fees since the case began in April 2013.

KRS has used outside lawyers billing as much as $400 hourly to fight the case, as WDRB reported in February.

The state has estimated the permanent exit of Seven Counties – which has about 1,400 employees – would cost the pension system an additional $2.4 billion over the next 20 years.

The pension system is billions of dollars short of what it needs to pay benefits and health insurance to future retirees. Therefore, the state legislature has been ratcheting up contributions employers – the majority of which are direct government agencies -- pay into the system.

Judge Lloyd was persuaded to Seven Counties' argument that, as a private non-profit agency, it can’t afford the escalating pension costs.

“Seven Counties can perform its charitable mission or pay System contributions that will force it to terminate operations. It cannot do both,” Lloyd wrote in an 83-page opinion. 

Copyright 2014 WDRB News. All rights reserved.
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WDRB. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.