Topeka While budget woes have gotten most of the attention in the Statehouse, a more long-term financial problem is appearing on the Legislature’s radar.
The Kansas Public Employees Retirement System has been rocked by the current recession. KPERS’ investment returns were down 19.2 percent in the last fiscal year.
KPERS’ unfunded actuarial liability was $8.3 billion as of Dec. 31, 2008 — the day officials took a snapshot of the system. From the previous year, that represents a $2.7 billion increase in the unfunded liability, which is the difference between the system’s assets and future pension obligations.
Glenn Deck, executive director of KPERS, says that current retirement benefits are safe, but that the state needs a long-term strategy to reduce the liability.
The fix “is very likely going to be a multi-year effort,” he said.
KPERS provides retirement plans for state and local public employees, including teachers, and has more than 250,000 members.
The House-Senate Pensions, Investments and Benefits Committee has given Deck the OK to come up with a proposal for consideration in the 2010 session that starts in January.
“We should put everything on the table,” said Committee Chairman Rob Olson, R-Olathe. “There are things that all of us are going to hate. We need to look at them all,” he said.
The options that will be considered include increasing the amount of funds that the state contributes to the plan, and having employees increase their contributions.
The KPERS staff also will look at whether future employees’ benefits need to be changed.
The sooner a proposal comes forward, the better, because it will cost money and be part of the expected budget battle, said state Rep. Geraldine Flaharty, D-Wichita, who is a member of the pension committee.
“We are going to have a tremendous budget fight in the next session,” Flaharty said. “We are going to have to pay our bills some way.”