Topeka ? Legislators were given few options — none of them cheap — to close a gap in the state’s pension program.

Officials with the Kansas Public Employee Retirement System said the difference between assets and liabilities had grown to $2.8 billion, with teachers and state employees accounting for $2.2 billion of that gap.

The news, delivered Wednesday to the Joint Committee on Pensions and Benefits, comes despite efforts during the 2003 legislative session to increase state contribution rates to close the gap.

Senate President Dave Kerr, R-Hutchinson and chairman of the committee, said the liability would occupy legislators in this and future sessions until the pension system is funded properly.

“It’s that kind of an issue,” Kerr said.

Legislators have authorized issuing up to $500 million in bonds to close the gap. Those bonds have not yet been issued, KPERS officials said.

Based on a Dec. 31, 2002, valuation, KPERS is funded to 77.6 percent of its liabilities for all employees and 75.6 percent for teachers and state workers. Those figures are based on current contribution rates and an annual 8 percent return on investments over the life of the portfolio.

Judges, local units of government, firefighters and police make up the remaining KPERS liabilities, but their plans are funded at different contribution rates than those of state employees and teachers.

The economy and bear stock market have taken their toll on the KPERS portfolio. Rob Woodard, KPERS chief investment officer, said the assets declined about $850 million, closing at $8.2 billion as of Dec. 31. However, the market has rebounded since then and assets are estimated at $8.97 billion as of Aug. 22.

Still, those earlier losses translate into lost earnings for the system and add to the increased liability, said Pat Beckham of Milliman USA, actuary firm for KPERS. She estimated the loss added $1.5 billion to KPERS liabilities.

“Given those statistics, we feel there is a long-term funding concern here,” Beckham said. “There’s no easy way.”

The committee was expected to discuss further solutions and current bonding authority today.