TN County Participants Suing over Pension Deposit Schedule

June 14, 2010 ( – Attorneys for Knox County, Tennessee and an employee group were scheduled to meet Monday on a possible settlement of a 2008 lawsuit over the county’s practice of depositing payroll pension deductions

A Knoxville News Sentinel news report said the suit, which involves current and former county workers, deals with a county practice before 2007 of comingling the mandatory 6% of each paycheck withheld for pension contributions into the county’s general fund for up to six weeks. The news report said the county now holds the money for about a week.

Employee Barbara Cook complained to the Knox County Retirement & Pension Board in March 2008 about the practice and then filed suit on behalf of the pension program to recover the interest the county accrued on the money.

“Retirement monies withheld from employees’ wage are to only be used to benefit the employees,” the suit states, according to the newspaper. “In correcting its policy of using employees’ funds for its own benefit, Knox County took no action whatsoever to (remedy) the losses suffered by its employees, i.e., lost interest through years of improper handling of employees’ retirement contributions.”

Attorney, Bill Hotz, representing Cook and several other workers, said the potential employee payout probably averages between $50 and $300 per person, and as much as $1,500 for someone who worked for the county since 1992 when it implemented its current retirement plan.

The county has asked Chancellor Daryl Fansler to dismiss the case. Fansler also will decide whether to let the case move forward as a class action lawsuit.