Request By:
Honorable T. L. Groves
Mayor
City of Flatwoods
2411 Argillite Road
Flatwoods, Kentucky 41139
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in response to your letter of March 5, in which you relate that the police department which operates its pension plan pursuant to KRS Chapter 95 has petitioned the city by 100% of the members of the department to dissolve the pension fund and refund the members' contributions. We also understand that no member has yet retired under the plan. The question is raised as to whether or not the pension fund can be abolished.
We assume that the City of Flatwoods, a city of the third class, 1s operating its pension fund pursuant to KRS 95.520 to 95.620, though the enclosed ordinance does not make this clear. Nevertheless, assuming this is the case, you will note that subsection (1) of KRS 95.520 mandatorily required that all cities of the third class provide a pension fund for its policemen and firemen as well as a board of trustees for the fund. See
Redmond v. Wheeler, Ky.App., 554 S.W.2d 391 (1977). Also, the word "shall" is a mandatory word under the definition of KRS 446.010(29) and has similarly been so construed in many cases with few exceptions, the latest being
Fayette County Educational Association v. Hardy, Ky.App., 626 S.W.2d 217 (1980). Under this act we find no provision for abolishing the pension fund once it is established, though those officers leaving the force are entitled to a refund of their contributions under the terms of KRS 95.620. We also might cite McQuillin, Municipal Corporations, Vol. 3, § 12.171, which cites case law to the effect that to discontinue a pension fund, compliance must be made with the statutory law governing the pension fund.
Thus, since it would appear that the statutes prohibit the discontinuance of the pension fund, we can only suggest that this question be presented in the form of a declaratory judgment to the circuit court, whereby the court could determine the question in light of the peculiar circumstances.