A lawsuit alleging the Kentucky Retirement Systems, Frankfort, illegally invested county employees’ retirement assets in private equity and hedge funds can move forward, a state appeals court ruled on Friday.
In 2014, city of Fort Wright, Ky., filed a class-action lawsuit against the board of the $15 billion KRS alleging board members breached their fiduciary and statutory duties by investing funds of the County Employees Retirement System in unauthorized high-risk and costly alternative investments. The statewide county employees plan is part of the overall Kentucky Retirement Systems.
The pension fund board argued it was entitled sovereign immunity and the lawsuit was not valid.
The court of appeals rejected that argument on Friday, upholding a previous trial court ruling.
David L. Eager, interim executive director at KRS, said the pension fund will confer with its outside general counsel on the next steps and could reach a decision next week on whether or not to appeal.