Topeka ? Just months after borrowing $500 million to shore up the Kansas Public Employees Retirement System, some officials are saying further reforms are needed to fix long-term funding problems to the public pension.

“They are budget-busters in some ways,” Senate President Dave Kerr, R-Hutchinson, said recently.

Kerr is leaving the Legislature in January after 20 years of service, but said lawmakers must keep working on KPERS to prevent massive financial problems for a future generation of lawmakers.

“If you don’t do it now, you are really creating some challenges 15, 20 years down the road,” he said.

The $10.3 billion fund has an unfunded liability of $3.6 billion, which is about $700 million more than last year. And that is despite the recent deposit of bonds into the system.

The unfunded liability is the difference between future pension obligations and current assets.

Glenn Deck, executive director of KPERS, said there was no danger to pensions and that the unfunded liability figure often got more attention than it deserved, but that officials needed to remain vigilant to keep the system sound.

“The system is perpetual,” Deck said. “You are not going to cash out.”

One of the major problems in the system is that the state is not currently contributing enough — about $100 million per year too little — to retirement plans for state employees and school employees.

“If you don’t pay that rate now, in the future it will go up,” he said.

Another problem is that the part of the pension plan for school employees has a proportionately larger unfunded liability than the one for other public employees.

That is because before 1971, the state had a pay-as-you-go pension plan that required annual appropriations to cover the benefits of retired teachers.

“That system was in real trouble and was a drain on the state budget,” Deck said.

When that system was folded into KPERS, “it came in with no assets,” he said.

KPERS home page State pension plan problems persist (09-02-04) $500M loan to prop up KPERS (2-3-04) KPERS relief reduced, delayed (1-8-04) Legislative committee to reconsider KPERS bond investment proposal (1-6-04)

Mark Desetti, a lobbyist with the Kansas National Education Assn., said the state needed to confront the problem because a large percentage of teachers were nearing retirement age.

“The problem has been exacerbated by the state not paying in as much as it should have put in,” he said.

Lawmakers have asked Deck to come up with some proposals to offer a different kind of plan for new employees that would reduce the benefits but add some sweeteners that would reduce the amount of time employees would have to work before they could join the pension plan and become vested.

“We need to make it good for the state treasury and desirable for employees,” Kerr said. Those proposals will be aired out in November during a meeting of the House-Senate Pensions, Investments and Retirement Committee. The committee may make a recommendation on changes to the Legislature that meets in January.