LOUISVILLE, Ky. (AP) — Kentucky’s struggling retirement system will get $23 million to cover a $21 million loss because of the risky mortgage-backed securities it purchased from Bank of America and its related companies.
Democratic Attorney General Jack Conway announced the settlement Thursday between Kentucky and five other states along with the federal Department of Justice. Conway said the Attorney General’s office would take a small amount of that money for attorneys’ fees but said most of the money would go to the retirement system.
The money is only a fraction of the retirement system’s $17.1 billion unfunded liability. But Conway said he believes this is the largest fraud recovery ever for the retirement system.
The Kentucky Employees Retirement System is the worst funded public pension system in the country, according to Fitch Ratings.
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