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Archive for Friday, February 26, 2010

Legislation being put together to increase state and employee contributions into KPERS

February 26, 2010, 3:36 p.m. Updated February 26, 2010, 3:37 p.m.

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Senate President Steve Morris, R-Hugoton, listens Friday during House-Senate committee meeting on pensions. Morris says that state government and state employees are going to have to pay more into the Kansas Public Employees Retirement System because of funding problems within the system.

Senate President Steve Morris, R-Hugoton, listens Friday during House-Senate committee meeting on pensions. Morris says that state government and state employees are going to have to pay more into the Kansas Public Employees Retirement System because of funding problems within the system.

— State taxpayers and public employees would have to pay more into the Kansas Public Employees Retirement System under legislation announced Friday.

Members of the House-Senate Pensions, Investments, Benefits Committee said the state needed to take action to shore up KPERS, which was hit hard by investment losses during the recession.

“It is imperative we get started,” said Senate President Steve Morris, R-Hugoton.

Increasing the rate that public employees pay into KPERS has never been done, Morris said. But, he added, “Times have changed, and we cannot do this alone at this point.”

Morris’ plan also includes a change in the multiplier that determines pension benefits, raising it slightly, which he said would show good faith with workers.

Several committee members said they wanted to study some other options, and Morris said his proposal would serve as a starting point. The committee authorized the introduction of legislation that contained Morris’ options.

State Rep. Geraldine Flaharty, D-Wichita, said KPERS’ funding woes are due to the state failing to contribute as much as it should have over the years. “I know we have a terrible problem, but it is us who caused this by not putting in sufficient funds in the 90s,” she said.

Glenn Deck, executive director of KPERS, said current retirement benefits were safe, but that the system’s ability to weather future economic downturns was compromised.

“Our funding status is tenuous over the long-term if we don’t take action,” Deck said.

KPERS has 268,000 members, which includes state workers, teachers, and many local government employees, and pays out $1.1 billion in benefits annually. The system has assets of $11.7 billion, but its projected gap between income and expenses over the next 25 years is $8.3 billion.

A report last week found gaps in long-term public obligations nationwide, but Kansas’ situation was listed as below par.

Deck said efforts to address KPERS’ funding shortfall will take years.

Art Hall, executive director of Kansas University’s Center for Applied Economics in the School of Business, has said the state should replace the government pension plan with a 401 (k)-style plan.

Comments

Linda Endicott 4 years, 1 month ago

Marce...it takes 10 years to become vested, not 5...I have worked at my current job for 9 years, and I'm not vested yet...

If you go to another job that has has KPERS, you can transfer it to the new job...if a new job doesn't have KPERS, you can get back part of the money that you have already contributed...I'm not sure you can get all of it back, though...

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somebodynew 4 years, 1 month ago

OK, I disagree with this plan as a state employee. That being said, I am not a teacher, and am not qualified to be one. Teachers should be among the highest paid people, not the lowest. Just consider this - they will teach the upcoming leaders of this society, not just politically, but business wise also. Do you want your kids being taught by people who are net getting paid fairly????

I don't.

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marcez0z 4 years, 1 month ago

I have worked for the state 2 1/2 years, never agreed with kapers and its purpose. Now having my job threatened by this coming up shortage in the budget. And it takes 5 years to become vested where is my money going to go if I get laid off? Up yours kansas legislator.

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Bob_Keeshan 4 years, 1 month ago

texburgh (anonymous) says... If you think that's a good idea, consider that the typical 401(k) lost 40% of its value in 2008. KPERS lost 28%.

Godot (anonymous) says...

the management of the investments make Bernie Madoff look like a financial puritan.


These two comments would appear to be diametrically opposed. I would be interested to hear a defense of both.

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farva 4 years, 1 month ago

What is a reasonable expectation of teacher pay? Obviously you don't want to do it for charity and live in near poverty...just kind of curious on what people think a non subject-specific teaching only position starting salary should be (based on a general elementary teacher...not a HS math/science or more advanced course teacher that should make more). I know some HS teachers make more than College Professors (PhDs at a Div II school, not KU)....

I agree forcing more contributions into KPERS is a special tax. Just as is the annual rejection of any longevity/performance, step increase, or cost of living allowance is.

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KSManimal 4 years, 1 month ago

toe (anonymous) says...

"Students are far more dependent on a family that values knowledge than a teacher who values pay."

Why is it that when teachers ask for decent salary & benefits, they are deemed unfit to teach? When was the last time you accused a doctor of being a quack just because they expect decent pay?

Nobody goes into teaching to get rich. However, they don't go into teaching to wind up bankrupt and homeless, either.

Just because the legislature failed to hold up their end of the bargain is no reason for the workers to have to pay more. Basically, what is being suggested here is a "special tax" only on Kansas' public employees. The legislature failed to do what it promised for public employees, and now it wants to tax them for it's own failure. Talk about adding insult to injury.

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farva 4 years, 1 month ago

jkilgore needs to go back to school, I really hope you are not a teacher. If so, it's no wonder Kansas cannot be a leader in education. A $4,000 difference between starting and experience salary is a much better chunk of change than $1,000. It gives you better social security and pension benefits and lets say over 10 years that equates to $40,000 more for experience than the average non-teaching government job over the same time period, which is especially not bad considering a 9 month work schedule. I have a professional level job--I am not a bean counter--and yes I have to work some holidays, weekends, and nights and manage a large budget and other employees...for the same pay as a teacher. So no, in normal standards, $4,000 difference for experience is not a lot, but compared to normal state govt workers it is and it adds up pretty good over time.

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toe 4 years, 1 month ago

Students are far more dependent on a family that values knowledge than a teacher who values pay.

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KSManimal 4 years, 1 month ago

jkilgore (anonymous) says...

"Manimal, the fastest way for education to deteriorate is to keep teachers pay low which will ensure that the worst teacher candidates are hired."

Preaching to the choir... :)

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Jeff Kilgore 4 years, 1 month ago

Manimal, the fastest way for education to deteriorate is to keep teachers pay low which will ensure that the worst teacher candidates are hired. You do remember what the difference is between a fantastic teacher and one who merely shows up to work? Apply that difference for 12 years in every class, and you get a world of difference in the outcomes of students.

Farva, my 26-year old daughter makes 5,000 less than I do after a 26-year career, so I already know what it feels like to make barely more than a college graduate, unless you're still willing to argue that 5,000 is an ungodly huge sum compared to 1,000, and if you do, then I can see with what sort of mind I'm discussing this.

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Steve Miller 4 years, 1 month ago

It's called bush leftovers. obama main meal...

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transplantedtexan 4 years, 1 month ago

Class action lawsuit!! I will lbe d@mned if they get anymore of my money. I pay the 6% as formentioned for new hires and I can barely support my family. taking more money away would mean no savings account no vacation back to living check to check. My wife works full time and so do I. I work days and she nights. I have cut my budget down as much as I can. If this continues maybe I will leave this great community and work in the oil fields or slaughterhouses i despise. Thanks to this so called democracy.

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KSManimal 4 years, 1 month ago

jkilgore says":

"During the past two decades of great economic gain, teachers were lucky to average a 3% raise in annual income. If you think that this doesn't matter, you are dead wrong. If creative and superior teachers are let go, students' education will suffer. The economy in time will rebound. Will teaching?"

Don't be so sure the economy will rebound over the long-term. If our nation allows its educational system to deteriorate - whether through neglect or all-out attack - the long term effect on the economy won't be pretty.

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KSManimal 4 years, 1 month ago

"The Kansas State Legislators have to be some of the biggest morons going... They admit that they basically broke the law by not putting in their required contributions. But to fix it, they will ask for more from ALL state workers, who had been putting in their pound of flesh, as required, paycheck after paycheck..."

Scruggsy - both your post AND your avatar reveal much common sense (and good taste).

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barrypenders 4 years, 1 month ago

This is unheard of!? To think that people would have to 'Save' their hard earned money for a rainy day.

Absurd!!

Stimulus, Print Mo Money For Me, and Posercare live unprecedented

Darwin bless you all

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Steve Miller 4 years, 1 month ago

Your all correct. However if you all look at the big picture, none of us will retire with a pension, hence, none of us will retire. The whole system is working towards everyone working until they die. This is already happening. How many people do you know now, that supposidely " retire" and go out and get another job to suppliment their " retirement" to pay for health insurance. Just about everyone. So in effect no one is really retiring, except a very rich few ( probably politicians". ). I really do not expect to "retire" and draw a pension. The company that i worked for for 26+ years went broke, now that pension is at risk of going broke due to no contributions and the bad economy. 401 k's are #ull^hi^ if you think that it will secure you a retirment check. , so i will have nothing in the end.. as will the rest of you.

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toe 4 years, 1 month ago

KPERS is not a retirement plan. It is a political plan. Taxpayers should revolt even at the thought of providing more funds.

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farva 4 years, 1 month ago

Must have been nice to average a 3% raise annually. Regular state employees got a step increase (2.5%) raise maybe 3 or 4 times over the same 20 years. Ever work in a place where senior employees with 25-30 years experience make within $1,000 of newly hired inexperienced employees? It makes it interesting for sure.

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Jeff Kilgore 4 years, 1 month ago

Godot, I appreciate your sensible response. No sector is safe from a bad economy. This is true. The problem for teachers is worse and I'll explain why. It is in your final comment.

To your final comment, yes, it seems that the only future job is a government job, that is, unless you hold a government job. I have taught for 26 years all in the state of Kansas but even so, I may lose my job to reduction in caused by the greed of Wall Street in which I have not participated and over which I have no control. Do you think that I feel safe? Teachers have always believed that although we're not paid as other professions are, our jobs at least were safe. During the past two decades of great economic gain, teachers were lucky to average a 3% raise in annual income. If you think that this doesn't matter, you are dead wrong. If creative and superior teachers are let go, students' education will suffer. The economy in time will rebound. Will teaching?

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texburgh 4 years, 1 month ago

Pittstatebb: You are only partly right. The rate was not changed for most KPERS members. The state created a second tier of employees. Those hired after July of 2009 pay a 6% rate; all those hired before that time pay 4%. The new hires get an automatic cost of living adjustment after retirement - essentially paying for it with the extra contribution. The people hired before 2009 and paying 4% do not get a cost of living adjustment after retirement.

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LawrenceAttorney 4 years, 1 month ago

So, the state just passed a law cutting my salary by 5% and now wants to take more of my below market salary to throw down the KPERS money pit. Yep, this will be the shortest job of my career. At some point only the truly unqualified will want to hold state government positions and then maybe the legistature will learn that you get what you pay for.

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pittstatebb 4 years, 1 month ago

Morris was either misquoted or is an idiot if he said that changing the rate that EMPLOYEES pay into KPERS has not been done before. Personally, I think he is an idiot; but will give him the benefit of doubt for being misquoted. As already posted by Edson, the rate was just recently changed from 4% to 6%. Someone is extremely misinformed.

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SeaBee 4 years, 1 month ago

“It is imperative we get started,” said Senate President Steve Morris, R-Hugoton.

Increasing the rate that public employees pay into KPERS has never been done, Morris said. But, he added, “Times have changed, and we cannot do this alone at this point.”

Well, state employees have pretty much "done it alone" over the last 15 or 20 years as they continually paid 4% of their pay to KPERS while the state shirked their share.

I remember a time 25 years ago when the state routinely shaved off higher than anticipated investment returns to use as revenue rather than let it fatten up the kitty.

Not really lookimg forward to a class action lawsuit that will cost the state even more money to force it to live upto its share of the bargain.

Let's please fire all these idiots next chance we get.

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willie_wildcat 4 years, 1 month ago

I think I speak for most of us when I say this is total bullsh*t!!! This is like trying to bale out water on an already sinking ship.

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Godot 4 years, 1 month ago

jkilgore, I ask, in the current political and economic climate, what profession would you recommend to your students? Currently under attack are doctors, healthcare administrators, insurance sales professionals, financial advisors, all business owners, anyone who makes a profit at his or her business, carbon users, cigarette makers and sellers, makeers of food that people enjoy, makers of machines that use energy, in fact, anything that is not government.

If I were counselling young people about their career opportunities, I would tell them that the only future is in finding a government funded job.

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Jeff Kilgore 4 years, 1 month ago

I agree that state employees will again have to pay for the mistakes that they did not create in order for KPERS to remain a solvent retirement. And social security? Changes have to be made there as well. I would ask, though, along with raising the KPERS contribution, for the state to begin to pay what it did not fund when it was supposed to.

In a recent teachers-only meeting, a fellow teacher asked us to consider what to say to a student considering teaching as a profession. She said that due to the waning support of teaching in both prestige and salary, she could not recommend teaching as a profession. This will not end well.

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Godot 4 years, 1 month ago

"the State" has made many mistakes with KPERS. The contributions from employees and employer have been too low, and the management of the investments make Bernie Madoff look like a financial puritan. Among the worst of all was the change in law at the turn of the century (meaning 2000) that allowed reitirees to take half of their KPERS retirement in a lump sum, based on an assumed annual return of 8 percent. Whoever came up with that idea, and whoever voted for it, and whoever signed that into law, deserves to shoulder a huge percentage of the blame for the impending default of KPERS.

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farva 4 years, 1 month ago

Anyone know what the employee rate increases and what the new multiplier is in Morris' plan? Most states require 4% deduction with a 2% multiplier upon retirement. Some states also have annual cost of living increases. Their pension programs are not hurting like it is in KS. Right now KS has a 1.75% multiplier...which is actually a large difference from 2% upon retirement...with no cost of living increases built in, with the same required employee contributions. We are already paying more for less than the average pension system, it would be interesting to see what rate and multiplier increases they are thinking and whether they can force them on existing employees. I think once you are in the program they cannot legally force changes such as this...which is why they jacked up the new employee contributions up to 6% and require 30 years service before retirement. But depending on the multiplier increase, it may or may not be desirable. But I'm guessing it will be a large contribution increase and very small multiplier increase.

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somebodynew 4 years, 1 month ago

@texburgh - I missed the part where the employer contribution goes up, so that is my bad. BUT, if your employer is the State it doesn't matter if their amount goes up because it seems they aren't paying it anyway. I don't like if my deduction goes up, but I can live with that IF the State starts doing their part also.

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Healthcare_Moocher 4 years, 1 month ago

Yes, the state got us in to this by not contributing the proper amount. But we must all work together to get out.


Screw that... Tax me so you can have a retirement from the money that I could have put in mine.

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Mike Edson 4 years, 1 month ago

Here is a perspective. A paraeducator's starting wage at Lawrence Public Schools is about $9.83 an hour. A new employee coming in to the system has to contribute 6% instead of the previous 4% to help shore up KPERS. It already takes more from the employee than they can afford. The contribution can average anywhere between thirty to forty dollars per pay bi-weekly paycheck. To increase the KPERS contribution for these employees would be insult to injury. They are already paid less than they are worth and a good portion of them will loose their job due to cut backs at the end of this fiscal year. KPERS is a sinking ship. I for one will be pulling my money out of KPERS as soon as I can. We need that money to put food on our table now not when we are retired.

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yankeevet 4 years, 1 month ago

KPERS should be on a volunteer basis.........I would rather invest my money in other adventures....instead of this worthless kpers.........

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texburgh 4 years, 1 month ago

Justanopinion - consider this. Your IRA was NEVER intended to be a retirement. Retirement was intended to be a three legged stool - social security/employer defined benefit pension/personal savings. Combined the three would let you enjoy a decent lifestyle in retirement. We need all three. Sadly, American business has largely abandoned the employer defined benefit and let private employees hang on their IRA's or 401(k). If you think that's a good idea, consider that the typical 401(k) lost 40% of its value in 2008. KPERS lost 28%. You need all three. You should demand all three.

The action proposed by the committee today increases the state contribution (employer) and the employee contribution. Yes, the state got us in to this by not contributing the proper amount. But we must all work together to get out. This proposal is fair. I wish employees did not have to help but if we want a solid system, we've got to be willing to stop pointing and offer to help.

Sad but true.

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rooster 4 years, 1 month ago

"Times have changed, and we cannot do this alone at this point.”

Well you lost the money alone and didn't fund it alone. So increase it alone.

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Scruggsy 4 years, 1 month ago

The Kansas State Legislators have to be some of the biggest morons going... They admit that they basically broke the law by not putting in their required contributions. But to fix it, they will ask for more from ALL state workers, who had been putting in their pound of flesh, as required, paycheck after paycheck...

Politicians suck. ALL of them.

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BABBOY 4 years, 1 month ago

Right on the mark Boston. Right on the mark.......

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Justanopinion 4 years, 1 month ago

Quite frankly as a person in her 20's who knows she is putting Social Security in only to not have it at retirement and then they added KPERS to that list I have no faith that putting in more will mean it will be there for me. I started an IRA to save my own retirement and would rather it be put there so it is under MY control so if it decreases in balance it is my fault.

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somebodynew 4 years, 1 month ago

Since the Legislature are the ones who didn't put the State's share in, let them pay. But no, take more out of the workers' measley pay checks. Great.

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Boston_Corbett 4 years, 1 month ago

Art Hall is an idiot. Remove the middleman and just let Koch Oil write him his salary check directly.

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