A lawsuit alleging that Kentucky Retirement Systems, Frankfort, illegally invested some participants' retirement assets in private equity and hedge funds has been dismissed, said David Eager, executive director of KRS, which has $12.3 billion across its five pension plans.
Fort Wright, Ky., filed a class-action lawsuit against the KRS board in 2014, alleging board members breached fiduciary and statutory duties by investing funds of the County Employees Retirement System in unauthorized, high-risk and costly alternative investments. Fort Wright is a participant in CERS, which is administered by KRS.
Franklin County Circuit Court Judge Thomas Wingate ruled in favor of the KRS board, saying, "There is nothing in the record or in the city's pleadings to this court that persuades this court that the board did not follow the law or did not appropriately apply the facts to the law."
These investments were not permitted by Kentucky state statutes, the suit alleged.
"The court ruling certainly affirmed what we have believed all along: that we're in our legal right to make investments, and the investments we made were legal," Mr. Eager said in response the court's decision.
Mr. Eager added that the plaintiffs have 30 days to appeal the decision.
Ronald Parry, attorney at law firm Strauss Troy representing the plaintiffs, could not be immediately reached for comment.