Archive for Friday, May 4, 2007

KPERS changes affect future hires

May 4, 2007

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— 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.

Comments

redfred 8 years, 4 months ago

And current retirees still do not get a cost of living increase!

Archie 8 years, 4 months ago

Pay in more, work longer, get less. Hell of a deal! Do legislatures get the same treatment?

bmwjhawk 8 years, 4 months ago

My thoughts exactly, redfred... nor do the future retirees hired before 2009.

napoleon969 8 years, 4 months ago

The article fails to mention the reason KPERS is $5 billion in unfunded liability in the hole. State employees have 4% of their gross pay deducted for KPERS; we don't have any choice in the matter. However, during the Graves administration, the State routinely failed to live up to its obligation to match that amount. Guess who gets to pay for that! Not the fat-cat Republicans thats for sure. Whose damn fault is it that we baby-boomers are reaching retirement age? I believe that's a truck that's been coming down the highway for the last 60 years.

Linda Endicott 8 years, 4 months ago

So the new hires can retire at age 60, with 30 years of service, or 65 with 5 years of service...

A five year age difference is worth 25 years?? Why?

At my job, there was a significant problem because the company was supposed to be taking out KPERS from day one of hire...yet they thought they didn't have to start that for a year, or after so many hours worked.

Oops...

But the company didn't tell this to KPERS, nor did they offer to pay them the back money they really owe them. KPERS doesn't find this out until someone leaves the company and demands their KPERS contributions, or until someone reaches retirement age.

johnadavies 8 years, 4 months ago

Wishing, and hoping, and thinking, and praying! KPERS retirement is like doing the proverbial in a dark suit!

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