The lawsuit was filed by three board members against their chairman, one current member, and two former members. The lawsuit alleges that the board members not only mismanaged the fund, but also made deals exchanging consulting contracts for election campaign money.
Filed in October, the lawsuit accepts that part of the loss was due to the declining market, but charges that their losses were more significant as a result of mismanagement of the fund by those named, as well as investment companies hired to help manage the fund, whose primary interests were increasing their fees.
During the past year, the pension fund board has changed its panel of investment advisors to decrease what was $2.1 million per year in commissions and fees paid by the fund to such consultants. The recent changes have decreased the annual cost to approximately $360,000.
Christopher Jones, an attorney for the lawsuit’s defendants, said the charges were unreasonable, according to the AP.
The Luzerne County pension fund includes about 2,000 former county workers and is overseen by three elected county commissioners, the county’s controller and its treasurer.