To the editor:
The Kansas Public Employees Retirement System study commission claims extravagant employee benefits are driving KPERS into insolvency. They claim a defined contribution (DC) plan solves the problem. Let’s look at the facts:
Employee contributions, not taxes, are the main source of KPERS funding. Taxes contribute less than one-fourth the total.
Public employees have not missed a single payment. But, for 17 years, the Legislature has failed to fund KPERS to the actuarial recommended level. Instead, they’ve passed billions in tax cuts and exemptions.
The average yearly retiree benefit, around $13,000, is hardly extravagant. Alone, it‘s barely above the federal poverty line.
Those who blame public employees for the KPERS shortfall are lying. The real problem is legislative pilfering. By eliminating guaranteed benefits, a DC plan removes legislative accountability and makes pilfering easier.
Those who claim a DC plan fixes the KPERS shortfall are lying. Legislative research estimated the DC plan would increase costs by $1.2 billion. The KPERS consulting actuary testified that a DC plan would provide 60 percent less in benefits. Who really wins if we spend more for lower benefits?
KPERS is currently a single-management account covering about 280,000 people. A DC plan would create 280,000 separately managed accounts. That’s 280,000 opportunities for investment managers to siphon profits out of public employees’ retirement.
Who lobbies for a DC system? It is, almost exclusively, investment managers. The DC push is a thinly-veiled attempt to enable greater pilfering from public employees and, ultimately, from all taxpayers.