The 2014 lawsuit brought by the City of Fort Wright against the Kentucky Retirement Systems’ (KRS) Board of Trustees alleging that the Board made illegal investments on behalf of the County Employees Retirement System (CERS) plan has been dismissed, handing the Trustees and Systems a major legal victory.
In a 16-page Opinion and Order issued yesterday, Franklin Circuit Court Judge Thomas Wingate ruled in favor of the Trustees, saying in part that, “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.”
The cause of action in the case was the City of Fort Wright’s claim that the KRS Board of Trustees had illegally invested in hedge funds and private equity funds on behalf of CERS. The City claimed that these types of alternative investments were not permissible under Kentucky law, thus making them illegal.
The Court agreed with the Systems’ interpretation of the statutes, and further confirmed that the CERS investments in alternative assets have been reviewed and approved by both the Kentucky Auditor of Public Accounts and by the Systems’ independent auditors. The Court noted that “The (state) Auditor has not indicated any disagreement with the types of investments about which the City complains.”