KPERS changes affect future hires
Topeka ? It wasn’t a sexy topic, but one of the major pieces of work in the just-completed legislative session will bring a substantial change to the state’s public employee pension system.
“Long-term, that is probably the most significant issue we’ve passed this year,” Senate President Steve Morris, R-Hugoton, said.
Senate Bill 362 increases the retirement age and employee contribution rate in the Kansas Public Employees Retirement System for employees hired after July 1, 2009.
Currently, KPERS members can retire under the 85-point rule, when their age plus years of service equal 85. For those hired after July 1, 2009, that rule is removed and the normal retirement age will be 60 with 30 years of service, or 65 with five years of service.
“Over the long-term this will save a significant amount of money,” KPERS executive director Glenn Deck said Thursday.
The measure also lowers from 10 to five the years of service required to guarantee eligibility for retirement benefits.
And for those new hires after July 1, 2009, who will be paying more into their pension plans, it will provide a 2 percent cost-of-living increase annually to their pensions when they reach 65.
The measure represents the third major effort in recent years to help the pension system deal with funding problems.
KPERS has assets of more than $12 billion, but the gap between its value and future obligations – called the unfunded liability – has grown to $5.1 billion. KPERS includes state employees, teachers and many local government workers.
In recent years, the state has increased its contributions to the plan and issued pension obligation bonds.
In addition to the unfunded liability concerns, KPERS needed to adapt to the fact that members were living and working longer, and that baby boomers – a large proportion of members – are hitting retirement age, Deck said.