- Associated Press - Wednesday, April 20, 2016

FRANKFORT, Ky. (AP) - Republican Gov. Matt Bevin removed the chairman of the Kentucky Retirement Systems board of trustees Wednesday, saying one of the country’s worst-funded public pension systems needs a “fresh start.”

Thomas K. Elliott was re-appointed to the board by former Democratic Gov. Steve Beshear last year. His term does not expire until 2019. The board is scheduled to meet Thursday morning, when Elliott could be re-elected as chairman. But Bevin issued an executive order late Wednesday afternoon immediately removing him from the board.

Bevin spokeswoman Jessica Ditto said the governor removed Elliott because, under Elliott’s leadership, the Kentucky Retirement Systems opposed a bill in the state legislature that would have required it to disclose investment fees, contracts and staff salaries on its website. And it would have required the systems to use the same competitive bidding process used by the rest of state government.

“KRS needs a fresh start and more transparency,” Ditto said.

Attempts to reach Elliott were unsuccessful. Kentucky Retirement Systems Executive Director William Thielen said Elliot will attend Thursday’s board meeting and the board will “conduct business as usual.” He said Bevin does not have the authority to remove Elliott.

“As an attorney, it would be my view that the governor has exceeded his authority in trying to do that and will probably end up in a some kind of a litigation over it,” Thielen said.

The Kentucky Retirement Systems is among the worst funded systems in the country. It has an unfunded liability of more than $19 billion. Bevin campaigned on fixing the problem, and as governor he proposed $650 million in spending cuts to begin paying down the debt. State budget talks nearly imploded over the issue of how much money to pay toward the debt over the next two years. And the Republican-controlled state Senate passed a bill it said would make information about the struggling system publicly available.

But the bill died in the Democratic-controlled state House of Representatives. Thielen, the executive director, sent a letter to lawmakers saying they should not pass the bill until the state completed a comprehensive audit of the retirement systems.

“I don’t think they have any clue of the impact of the proposals,” Thielen said. “They needed to wait until that audit was conducted before they made major changes to the system.”

Bevin’s office cited a Kentucky state law that says the governor can remove any officers appointed by him “for any cause the governor deems sufficient.” The exceptions are the board of trustees for public colleges and universities, the Council on Postsecondary Education and the state Board of Education. They also cited a 1934 state appellate court decision upholding the right of then-Gov. Ruby Laffoon to remove a member of the state highway commission without giving a reason.

This is the second time Bevin has removed the political appointees of his Democratic predecessor. Last month, he removed Kentucky Horse Park Commission chairwoman Alston Kerr from her unexpired term and replaced her with Louisville attorney Tandy Patrick. Democratic lawmakers protested, and House Speaker Greg Stumbo asked Attorney General Andy Beshear to issue an opinion.

Beshear said Bevin did not have the authority to make the change, but the opinion was not binding and Kerr was removed.

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