PAAMCO Prisma v. Board of Trustees of the Kentucky Retirement etc. CA4/3

FACTS AND PROCEDURAL HISTORY

KRS is the retirement system (including its various separate funds and board of trustees) for the State of Kentucky’s employees. In 2011, KRS entered a set of contracts with PAAMCO (a California-based investment company) whereby PAAMCO would manage an investment fund for KRS, with an initial $400 million investment. PAAMCO was one of three firms chosen by KRS to handle investments of this kind. 1 For reasons that are disputed, by late 2017, KRS’s pension plans were substantially underfunded, to the tune of billions of dollars. In an attempt to remedy the situation, a group of current and former Kentucky employees (the “employees”) sued KRS, its officers and former officers, PAAMCO and the two other investment firms, and

1 PAAMCO cites “underfunding and enormous investment losses arising from the burst of the dot-com bubble in 2001 and 2002 and the financial crisis of 2008 and 2009,” while KRS appears to contend PAAMCO and the other two investment firms are primarily responsible. Resolution of this question is well beyond the scope of this appeal.

2 2 various other advisors, actuaries, and others. While the employees’ factual allegations were complex…