Archive for Thursday, September 2, 2010

Despite gains, financial problems continue to plague KPERS

September 2, 2010


The Kansas public employee pension system made investment gains last year, but still faces significant funding problems that need to be addressed soon, officials said Thursday.

“We’ve had some modest improvement,” said Glenn Deck, executive director of the Kansas Public Employee Retirement System. “We still have a major long-term funding shortfall.”

The fiscal health of the system that has 250,000 members is gauged by a snapshot taken Dec. 31, 2009.

At that time, the unfunded actuarial liability -- the difference between the system’s assets and future pension obligations -- stood at $7.7 billion.

While that seems astronomical, it is lower than the Dec. 31, 2008, snapshot, which was a record $8.3 billion.

The improvement occurred because 2009 was a good year in the stock market, and KPERS was able to reduce its liability by $600 million.

The value of the system’s portfolio stands at $11.2 billion as investments increased 14.9 percent over the past year. But as of late, that market surge has stopped and consultants predicted slow growth for the next year.

The unfunded actuarial liability doesn’t impact current benefits, but officials say a plan needs to be implemented to address the issue over the long term.

Senate President Steve Morris, R-Hugoton, and chairman of the House-Senate Committee on Pensions, Investments, and Benefits, agreed.

One of the top priorities for 2011 Legislature, which starts meeting in January, will be to correct the KPERS situation, Morris said.

“We are not in a crisis, but if we don’t take action in the near future, we could be,” he said.

The fix is going to mean increasing the state’s contribution to the system, he said. One plan, which Morris said he favors, would increase the state’s contribution by approximately $58 million per year.

A recent report by Pew Center for the States rated KPERS as one of the most underfunded pension systems in the country.

Deck agreed, saying, “We are certainly one of the lower-funded systems, and one of the reasons, we are not contributing at the actuarial rate.”

Patrice Beckham, an actuarial consultant with Milliman, said the problems with KPERS are similar to those of most public and private pension plans that were hit hard by the recession.

“It’s a bit of a roller coaster ride,” she said.


gbulldog 3 years, 7 months ago

How much will part-time workers (the Legislature) receive in benefits vs the full time State retired employees. I know many retirees whoes KPERS retirement will not cover their cost of health insurance, and that problem will only get worse. KPERS and the KS Dept of Adm need to conduct classes for State employees and retired State employees on how to ask for assistance from SRS or from charities to make ends meet.


LJ Whirled 3 years, 7 months ago

Individual accountability would be in order.


toe 3 years, 7 months ago

Benefits promised are way more than are being funded. It is likely retirement age must be increased, contributions from the State increased, and contributions from participants increased.


bobberboy 3 years, 7 months ago

I really can't imagine the state of kansas can do anything right what with their retarded republican leadership. Remember oneal ? - jeeeeezzzz what a screwball !!


oneeye_wilbur 3 years, 7 months ago

Maybe they invested with Madoff or like the past in a bunch of shopping centers. KPERS should really entertain Rich Minder's idea and own housing with the school district as Minder believes that the district would make a good provider and landlord of housing for teachers.


yankeevet 3 years, 7 months ago

So what happened too all da money??


rooster 3 years, 7 months ago

Glenn Deck....

I would hate to have that name.


bobberboy 3 years, 7 months ago

that's only because the legislators chose not to put anything into it for the last 10 years. They're always coming up with new ways to take advantage of State employees.


oneeye_wilbur 3 years, 7 months ago

MAYBE KPERS would like to invest in Rich Minder's "teacherage" housing. It is sure to be a big payoff and return a good per cent on the investment.


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