Active and retired Kentucky public school teachers plan to file a class-action lawsuit Tuesday against Kentucky Gov. Matt Bevin and the Kentucky Legislature for allegedly illegally underfunding the $17.5 billion Kentucky Teachers’ Retirement System, Frankfort, said Randolph Wieck, one of the plaintiffs.
The lawsuit, expected to be filed in Franklin Circuit Court in Frankfort, will allege that inadequate state contributions contributed to KTRS’ roughly $25 billion in unfunded liabilities, violating parts of the U.S. and Kentucky constitutions and Kentucky’s revised state statutes, the plaintiffs’ attorney Theodore Lavit said.
The alleged underfunding violated a contractual obligation and has been ongoing for at least eight to nine years, Mr. Wieck said.
KTRS disclosed a funded status of 54.6% as of June 30, which is expected to be closer to 41% under new GASB 67 standards, Mr. Wieck said.
Although a budget bill signed by Mr. Bevin in April included about $498.5 million more in pension contributions to KTRS in fiscal year 2017 and $474.7 million in fiscal year 2018, the amounts fall slightly short of KTRS’ actuarially required contribution rate and borrow from a public employee health insurance trust fund. Mr. Bevin took office in 2016.
Amanda Stamper, a spokeswoman for Mr. Bevin, could not immediately provide a comment. Gary Harbin, executive secretary at KTRS, could not immediately be reached for comment.