Topeka Both candidates for Kansas state treasurer said Monday that the state needs to tackle the long-term funding shortfall facing the pension system for teachers and other government workers, but they disagreed on how to get started.
Republican nominee Ron Estes, the Sedgwick County treasurer, said he'd form an advisory group to draft recommendations for legislators. State Treasurer Dennis McKinney, a Democrat, questioned the need for such a group and said both government agencies and their employees will have to contribute more money in the future to the Kansas Public Employees Retirement System.
KPERS valued its assets at $11.8 billion at the start of this year, or about 64 percent of what it would need to cover its obligations to some 260,000 current and future retirees, leaving a gap of nearly $7.7 billion. A Pew Center for the States study earlier this year said Kansas has the second-worst ratio of assets to long-term pension obligations of any state.
Estes raised the issue during a Statehouse news conference to tout an endorsement from U.S. Rep. Lynn Jenkins, a fellow Republican who served as state treasurer from 2003 to 2008. Under Kansas law, the state treasurer serves on the KPERS Board of Trustees, making the pension fund's chronic funding issues relevant, though the treasurer's race has received little attention ahead of the Nov. 2 general election.
"I want to be the champion for KPERS, to take that to the Legislature, form a working group with the Legislature and the governor, to make sure that we address and resolve that funding shortfall," Estes told reporters.
But McKinney said he's already speaking out about the pension fund's long-term funding problems and noted that the KPERS board has been discussing them for months.
"The KPERS board is unanimous in supporting the position that we're going to have to have to make changes," McKinney said. "It can't be ignored any more."
McKinney, from Greensburg, is a former House minority leader who was appointed treasurer by then-Democratic Gov. Kathleen Sebelius at the end of 2008, when Jenkins resigned after winning a seat in Congress. Estes, from Wichita, is a longtime corporate manager who was elected Sedgwick County treasurer in 2004.
Governors and legislators have struggled with the pension system's long-term funding woes for two decades. Last year, the Center for Applied Economics at the University of Kansas declared the system "bankrupt," frustrating officials who emphasize that no current benefits are in danger.
Some lawmakers, particularly Democrats, suggest the state has shirked its funding responsibilities over the years. But some critics, most notably conservative Republicans, argue Kansas should move toward 401(k)-style plans for employees, rather than guaranteeing set benefits based on salary and years of service.
Earlier this month, Senate President Steve Morris, a Hugoton Republican, declared his support for a plan to increase the state's annual contribution to KPERS by $58 million. McKinney noted that the KPERS board and two legislative committees have been reviewing KPERS funding issues.
"So I don't know how many more groups we need studying this," McKinney said.
Estes said he wants to form a working group on KPERS to give taxpayers say in drafting a solution to the pension system's problems. Asked whether government agencies must increase their contributions to KPERS, he said the state also has to examine the benefits it pays and the pension fund's investment earnings.
"You need to factor all three of those legs in, in terms of, how do we make the program more financially sound?" he said.