The state’s public employee pension system has suffered a record drop on the stock market, losing more than one-quarter of its value this year, officials reported Tuesday.

“These losses are very unprecedented,” said Glenn Deck, executive director of the Kansas Public Employees Retirement System.

The KPERS downturn — combined with other budget problems — prompted Senate President Steve Morris, R-Hugoton, to say that a state employee pay raise and cost-of-living increases for retirees were probably out of the question.

And, he said, the Legislature should consider within two years increasing the state’s contributions to the retirement system.

“I don’t think we have any choice,” Morris said during a meeting of the House-Senate Committee on Pensions, Investments and Benefits.

Lawmakers start the legislative session next month and already face a $147 million budget shortfall that could balloon to $1 billion within the year.

The drop in the KPERS assets has been dramatic and prompted comparisons to the Great Depression in the 1930s.

The total assets of KPERS stands at $10.1 billion. That is a 22 percent drop in the fiscal year that started July 1 and a 26.8 percent drop for the calendar year. The portfolio had been at $14.2 billion in 2007.

KPERS officials said there will likely be a “snap back” but added that the recovery would have to be significant and long to make up the losses.

“There is no way to recover from this type of event very quickly,” Deck said.

But Deck emphasized that current KPERS benefits are “safe.” The system pays out about $1 billion per year in benefits, he said.

Deck said another “Great Depression” round of stock losses and the state reneging on its contributions would be the only way benefits would be in danger.