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Lexington-Fayette Urban County Police Department - Lexington, Kentucky

Lexington, former officers settle pension suit

Lexington and several former police officers have settled a lawsuit over the city's contribution to the ailing police and firefighters pension fund.

In court documents filed this week in Fayette Circuit Court, the two sides ended a more than six-year court battle over how much the city should contribute to the cash-strapped fund.

The Lexington Herald-Leader reports the city put $70 million into the pension fund this week using bond money.

"This is historic," said Susan Straub, a spokeswoman for Mayor Jim Newberry. This is the first significant contribution the city has made to fixing the unfunded liability of the pension, Straub added.

Tommy Puckett, a retired police officer and plaintiff in the lawsuit, said the former police officers agreed to the settlement as long as the city continues to make contributions to the fund. Puckett said the city agreed to put an additional $30 million in bond money into the fund this year.

"We can always come back if they don't fund the pension properly," Puckett said.

Puckett said their accountants figured the city owed approximately $63 million in back payments to the fund for pension payments since 2003.

Puckett and four other police officers sued Lexington in 2003, saying it didn't contribute enough to the public safety pension fund.

Police and firefighters contribute 11 percent of their salary to the fund, and the city also makes contributions - a percentage of the total salaries of all public safety employees. That percentage is set by the pension board, based on an actuarial analysis.

But the city has contributed much less than the rate set by the board between the fiscal years of 2003 and 2006, the lawsuit argues.

The city, in court documents, argued that the statute governing pensions says that it has to contribute a minimum of 17 percent of its public safety payroll to the fund. The city has exceeded that amount over the past several years.