Judge Slams Reinstated Pension Official For Missed Meetings

Aug 31, 2016

Credit Kentucky Retirement Systems (kyret.ky.gov)

The absence of the former board chair of the Kentucky Retirement Systems at official meetings is “not acceptable,” according to a judge who temporarily blocked the governor from removing the official.

Franklin Circuit Court Judge Phillip Shepherd ruled last week that Tommy Elliott could still be a member of the agency’s Board of Trustees while the court decides if the governor had the power to remove him from the board three years before his appointed term was set to end.

But Elliott did not attend meetings of the full KRS board or investment committee last week.

During a scheduling hearing on Tuesday, Shepherd said the poor condition of the pension system is an “all-hands-on-deck situation” and he criticized Elliott for not showing up.

“If Mr. Elliott’s too busy to serve, he ought to resign or he ought to be prepared to be replaced,” Shepherd said.

Kevin Chlarson, Elliott’s attorney, said the former chair had preexisting obligations during the meetings and couldn’t be in Frankfort. Elliott is senior vice president of Old National Bank in Louisville. He was appointed for a second four-year term on the KRS board by former Gov. Steve Beshear last year.

Bevin removed Elliott from the KRS board in April, citing a need for a “fresh start.”

The pension system manages retirement funds for about 350,000 state employees and has around $20 billion in unfunded liabilities.

Elliott sued Bevin for the move, and Attorney General Andy Beshear joined the lawsuit after the governor abolished the board, later reorganizing it without Elliott in the lineup.

Last week, Judge Shepherd ruled that Bevin’s overhaul of the board could go forward while the case is pending while also blocking the governor’s removal of Elliott. Bevin’s general counsel, Steve Pitt, said that raises questions about Elliott’s presence on the board.

“The board that Elliott was a member of was abolished, it no longer exists,” Pitt said.

The board is currently chaired by John Farris, an economist from Lexington.

Although he didn’t attend meetings last week, Elliott made has made substantial effort to stay on the KRS board over past months.

After Bevin’s executive order dismissing him in April, Elliott refused to step down while he and the agency sought an advisory opinion from Beshear’s office asking if the governor had power to remove him before his term ended. Beshear argued Bevin was not entitled to remove Elliott.

Then in May, Bevin’s chief of staff, Blake Brickman, and Kentucky State Police troopers attended the regularly scheduled KRS meeting, threatening Elliott with arrest if he participated, which he did not.

Elliott then sued the governor over the move.