Topeka A Democratic legislator serving on a commission studying Kansas’ pension system questioned Wednesday whether Republican Gov. Sam Brownback has been improperly involved in its deliberations just before it recommended starting a 401(k)-style retirement plan for new public employees.
State Rep. Ed Trimmer, of Winfield, raised the issue amid the commission’s debate over starting a new 401(k)-style plan, an idea Trimmer opposes and Brownback supports. Trimmer cited a report on The Wichita Eagle’s editorial blog, quoting Brownback from an interview with the newspaper’s editorial board, saying the commission will recommend such a change.
Later Wednesday, the commission voted 8-5 to recommend to legislators that the state require teachers and government workers hired after June 2013 to join a 401(k)-style retirement plan. Kansas Public Employees Retirement System plans now guarantee benefits up front, based on a worker’s salary and years of service, rather than tying benefits to investment earnings, as 401(k) plans do.
Brownback appointed five of the commission’s 13 voting members, and all five supported the move to a 401(k)-style plan for new hires.
Trimmer said Brownback’s role in the commission’s work ought to be examined to determine whether the state’s Open Meetings law has been violated, though he later said he wasn’t accusing the governor or fellow commission members of wrongdoing.
‘Already said before’
Both the governor’s chief spokeswoman and one of his appointees to the commission said the questions are unfounded.
Brownback has predicted repeatedly that the commission would propose a 401(k)-style plan for new hires or at least a “hybrid” between such a plan and the state’s traditional plans. The governor repeated that prediction in his meeting with The Eagle’s editorial board.
“The governor didn’t say anything he hasn’t already said before,” said Brownback spokeswoman Sherriene Jones-Sontag.
The debate over starting a 401(k)-style plan pits the governor and his conservative Republican allies in the GOP-controlled Legislature against Democrats and public employee groups that strongly oppose the idea. Supporters of moving toward a 401(k)-style plan contend the state can’t sustain traditional pension plans, but opponents believe such a plan will lead to less secure and less generous retirement benefits.
KPERS projects an $8.3 billion gap between anticipated revenues and the benefits promised by existing plans through 2033.
The law creating the commission this year also will increase the state’s annual contribution to KPERS and require some concessions of workers, but many legislators and commission members don’t believe it will close the gap. The commission plans to meet again today and must present its recommendations to legislators before they convene their annual session Jan. 9.
The Eagle’s editorial blog quoted Brownback as saying the commission would recommend switching to a 401(k)-style plan for new employees.
“How does he know that?” Trimmer said during the commission’s meeting Wednesday. “It does open up some questions.”
A longer story about the interview, published Wednesday, said Brownback told the editorial board he expects the commission to recommend such a change.
The newspaper provided a transcript from a tape of the interview Tuesday, in which Brownback noted the commission would meet and added, “I think they’re gonna recommend defined contribution system for new hires.” Defined contribution is a term for a 401(k)-style plan.
No inappropriate action
Edward Condon, of Leawood, an executive in a capital management firm appointed by Brownback to the commission, said he hasn’t been a party to any discussions or actions that would violate the open meetings law.
The plan endorsed by the commission was drafted by one of its co-chairmen, state Rep. Jeff King, an Independence Republican, who said after the meeting, “This was not drafted from the governor’s office.”
Legislators and public employee groups opposing a 401(k)-style plan contend its startup costs will divert resources from closing the KPERS long-term funding gap. To lessen those costs, King’s plan would start the state’s contribution at 1 percent for first-year employees, increasing it to 5 percent by their ninth year of employment; workers would be required to contribute 6 percent of their salaries.
But he acknowledged that his plan is aimed at providing financial stability for KPERS for decades, not narrowing the funding gap in the short-term.