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Archive for Wednesday, March 2, 2011

School officials criticize Kansas House bills dealing with KPERS funding

March 2, 2011

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— Two bills aimed at funding problems in the public pension system were criticized Wednesday by school officials.

Under House Bill 2310, if a retiree in the Kansas Public Employees Retirement System got another job with a KPERS employer, the person could not receive retirement benefits while he or she was still working.

Educators said this would essentially wipe out a stable of experienced teachers and administrators who, after they retire, come back to work as substitute, special education and math teachers.

“It very well could put special education in crisis,” said Robert Coleman, manager of the ANW Special Education Cooperative of Humboldt.

During the hearings, members of the House Pensions and Benefits Committee also expressed misgivings about HB 2130.

State Rep. Charles Roth, R-Salina, referred to it as a “meat cleaver approach.”

Chairman Mitch Holmes, R-St. John, said the bill “will probably be heavily amended.”

The other bill, House Bill 2328, would require local school districts to pay more into KPERS. Education officials said the additional expense, combined with recent budget cuts to schools, would be difficult to manage.

KPERS has a $7.7 billion gap between the value of its assets and future obligations. Gov. Sam Brownback has said fixing the long-term funding problems is one of his top priorities.

KPERS officials have said that current benefits to retirees are safe.

Comments

MrClean 4 years ago

This is fantastic. The job hunt begins today! Thanks State of Kansas. Straight off my childrens' plates and into your money grubbing hands. This is your potential solution to your poor management of the state's finances. Very nice. Time to start looking for a home under the Kansas River Bridge. Hope they have a spot for the four of us.

Alceste 4 years ago

I don't think there will be " spot" for you, MrClean: Go ahead and bite your nose off to spite your face. See who cares. Dare ya.

MrClean 4 years ago

Maybe I can just move you over and take your spot. Obviously, you care little about the hard work KPERS employees put it, and for very little pay. This bill will be a blow to public service across the state. But, why should you worry. Sounds like you have it all figured out, slamming me like that. That's the last time I will reply to crap like yours.

Jeff Kilgore 4 years ago

You are wasting your time. Here is what Kansas teachers give to the state: Test scores that are almost always in the top 15 and many times in the top 10. Salaries? Stagnant. Our retirement system is funded at 58%, the 49th ranking state in the union behind pathetic Illinois. What grade is 58% in my class? An F. A Big Fat F--the state's rating on funding real public servants, not like those who call themselves that in political circles.

What is happening is that the right knows that only power it has against the educated elite is to stomp on them with threats to benefits. That is what they will do. They have no idea that the average KPERS monthly benefit is $1,100 a month. They are too incurious, too lazy, too uninformed, and too easily persuaded to believe whomever they elect. That is a fact.

Facts are a bother. What matters to them is their stale, 1950s world view which is crippling our nation and is so regressive as to be childish, but that is the America they want. Poor teachers is what they will end up with. Poor teachers is what they deserve. And an even more ignorant, reactionary society will be their fate, and unfortunately, ours. Democracy and intelligence are often miles apart.

Punish teachers for the inability of elected officials? Only in Kansas.

Alceste 4 years ago

We need to sell Yankee Stadium; give away the White House; and just get it over with.....

Jeff Kilgore 4 years ago

It's our money. We contributed to it and we worked for it. Hate the working person. That makes America stronger.

jafs 4 years ago

I'm generally very supportive of labor, but receiving retirement benefits while working seems a bit odd.

windex 4 years ago

Happens all the time in the military.

MrClean 4 years ago

The fact KPERS retirees have to "double-dip" as you would call it, should be an indicator to you of the low salaries and underfunded retirements they have spent their entire careers working toward. Who wants to work after retirment!! This bill pulls money from the wrong people. Work harder Topeka, that is what you are paid for.

Alceste 4 years ago

Looking forward to that gravy train of double dipping: KPERS 100% benefit followed by a cush job provided by a crony developed during that MAYBE 9 month a year job in "teaching" and then not having to contribute to KPERS because that's the way it works once you start drawing KPERS benefits?

I have close family who are in public school education. Each get paid over $60k per annum right here in Kansas. Like you, they too complain they're underpaid.

Wait....I have never once seen a teacher stand in solidarity to support other "service industry" slots such as those in public welfare, say, as an example. In Kansas, at any rate, teachers have taken the money and run...forgetting about others who didn't have the "sway" teachers have somehow generated....and I'd say carrying a caseload of over 200 PEOPLE on public assistance is darn demanding....not to mention the people who get to go into homes and witness man's inhumanity to man on a daily basis in the form of adult abuse or child abuse; and that's just one facet of "service industry" slots.

Oh, and MrClean....it's not "my" spot under the bridge you'll be vying for....I've already grown accustomed to a modest life style and have learned I really don't require all those "nice" things folks like you see as essential and "middle class". Time to sit down now, grasshopper.

Bob_Keeshan 4 years ago

Do you even know what current KPERS law is on "double dipping"? Perhaps an informed opinion for once?

Alceste 4 years ago

Sure do.....once you start drawing KPERS, that's it: If you should ever obtain employment in a KPERS covered "job", you do not contribute anything, and you continue to draw your pension while working for a KPERS outfit. Great deal: You draw your KPERS pension; you pull strings and get a croniefied easy pluff job with a KPERS employer but do not contribute dime one to the pool. What a racket.

Larry Bauerle 4 years ago

But the benefit received is based on contributions previous to retiring. Even though the retiree works, and draws a pension at the reduced rate, the benefit never goes up, because they are no longer contributing. Those who complain about what others make should get a different job. I don't make much, but I made my choices and I will live with them now.

Alceste 4 years ago

All you need is 85 points to get 100% pension when in Kpers. age + years of service = 85 (with a minimum of 30 working years; and a minimum age of 55 as I recall; except for corrections which is now only a minimum of 20 years worked).

If someone begins working as a teacher at 25....works a mere 30 years....one can retire with a 100% KPERS pension.

Next, the person is GIVEN a job by some crony within "education" as a "consultant" or some manner of non-sense...within public education and gets the 100% KPERS retirement plus the easy money check for "consulting" and the icing on the cake is that the easy money check has no KPERS withholding removed. DEAD WEIGHT. SICK STUFF. (MANY "administrators" do just as is described above. Be Happy to provide some names....get me immunity from the LJWorld.com folks...).

MyName 4 years ago

Sounds like the solution then is to have them continue to contribute to the retirement system if they are below a certain age. Not to cut off their current benefits. Name one private sector company which lets you retire early and then cuts you off from the benefits you've already earned?

Alceste 4 years ago

I am not suggesting the termination of their earned retirement payment.

However, the fact they don't pay into the system is disgusting. They "Played ball" with Mr. Charlie while "in the system", complete with their stagnant thinking and parlay that brown nosing into a cushhy "consultant" thing...still brownnosing one wazzoo after and another....and now not even paying into the system as they double dip and holler for me. "It's for the children". Give me a break. VERY specious and unctuous.

windex 4 years ago

So happy to hear about your close family members who make over 60K teaching. Clearly they're not in Lawrence.

Sunny Parker 4 years ago

Teachers maybe shouldn't retire if they don't want to really retire! There are plenty of unemployed people that need those jobs the teachers are stealing! Please stop whining! You chose your profession!

notanota 4 years ago

Then maybe we should quit offering them incentives to retire early. We do that because we want to hire some fresh graduate that gets paid less, and then we want to hire back the "retired" teacher for a part time job.

MyName 4 years ago

Yes, because clearly every person who has ever taken early retirement does so by choice.

volunteer 4 years ago

Why didn't Sebelius and Parkinson jump up and down and come up with ideas to solve this "crisis?" Now we are in a situation where a much less public employee-sympathetic guv and House are gonna decide something.

The lt governor's nephew, a Harvard-grad, former Wall Street big-numbers (company takeover) guy, proposed during "transition team" meetings that all state employees work one`year with no accrual of benefits. The politicians in the room would not go for it.

notanota 4 years ago

Let me think back on it. Do you recall which party controlled the Senate and House during Sebelius/Parkinson's terms? Perhaps that might answer a bit of your question.

William Weissbeck 4 years ago

I used to think double dipping was wrong, but then I realized that the school or government unit would still be paying the same salary no matter what. If the retiree stayed retired, the school would simply be paying someone else. The question should be can the school replace the retiree with another hire without a significant drop in experience and at a lower cost? True double dipping is where a retiree collects full pensions from two different jobs (usually two different pension systems). Lost in the debate because the GOP wants to focus on the word "contribution" and the idea that this is the taxpayer's money, is the fact that once it is paid to a teacher or government worker, it is their pay. Anything that is done to their pay is a pay cut. The GOP can't claim they somehow have a superior right to set the terms because it is taxpayer money - in the end taking into account pay and benefits, it is either a fair, living wage to the employee or it isn't. In addition, the state or any government, should be in the forefront for the model for employee pay and benefits. Using as justification that lots of workers have fewer benefits like pensions and funded healthcare becomes a race to find the lowest common denominator.

gudpoynt 4 years ago

VERY GOOD POINTS!

Should the House bill pass, then they will disincentivize retired, and experienced public educators from returning to work after retirement age. Then what? Those jobs will be filled by younger, less experienced, public educators, and the retirees will still be drawing from KPERS. The result is no net gain. Doesn't help KPERS in the long run. Only in the short term -- that is, only in the time it takes for retired teachers to become disincentivized, which I would guess would be about 2 years. After that, back to square one.

gudpoynt 4 years ago

thousands of recent certified teachers, and a state government that's combining classrooms, reducing staff, and cutting general funding for programs across the board -- all in the name of "protecting" businesses in an effort to stimulate our economy -- and all in spite of a promise by the governor to "protect" public education.

Their solution? Let's change the rules. So that after 30 or so years of service, after 30 years of devoting part of your salary to KPERS, after reaching the agreed upon age of retirement, and after returning to work for extra money upon realization that KPERS benefits will not provide the retired life of luxury you see in the commercials, we're going to change the rules on you, so you don't get your benefits like we originally said you would.

But suck it up retirees. KPERS is quickly going broke, and although we promised you reasonable benefits, we haven't been very responsible about making sure you will get them.

But look no the bright side, the money we promised you, that you won't be getting, will almost certainly help prevent drastic cuts in public education funding. Right? Right?

What. A. Bass. Ackwards. Legislature.

jafs 4 years ago

Generally agreed.

But if you're going to retire, you should plan ahead a little bit, and not be caught unawares at the last minute - you can estimate your benefit at the KPERS web site pretty easily.

These days, I'd say you need some Social Security, savings/investments, and KPERS to retire somewhat comfortably.

usnsnp 4 years ago

Speaking of double dippers, how about our governor, he will be drawing a federal retirement, social security when he is 66 and whatever he can rangle out of the state plus if he does not run for President a salary from some lobbying company when he is not governor any longer. Of course he deserves this because he so much smarter than the rest of us.

Charles L Bloss Jr 4 years ago

KPERS keeps telling us we are safe. Until the bottom falls out someday and we have no pension. The legislature has been borrowing from the pension fund, just like the feds have been raiding the social security trust fund for years. They always say they will pay it back, but guess what they never do. We retirees worked hard all our lives, and we are entitled to a state and federal pension to try and help us live in these days of $ 4 a gallon gas. The feds didn't give us a cost of living increase last year. With the rise in cost of everything due to the costs of fuel, they had better do it this year. Thank you, Lynn

Janet Lowther 4 years ago

Back in the '80s, KPERS was one of the best funded state pension systems in the country, but even then it faced a deficit.

Then the state lowered its contribution rates (and those for the school boards) but kept the same benefits, and the funding deficit has grown ever since.

Dave Trabert 4 years ago

According to KPERS, most employees contribute 4% of their pay (in after-tax dollars). The actuarially required employer rate based on the market value of assets is 15.26% and is expected to rise. Employers currently aren't putting that much into the plan but eventually they will be forced to do so.

Pension benefits are calculated by formula: Final Average Salary (FAS) times years of service times a statutory multiplier. FAS is the greater of (a) average of the highest three years of base earnings or (b) average of the highest 4 years of total earnings, which includes overtime, supplemental pay, bonuses, etc. The multiplier is 2.5% for Police and Fire, 3.5% for judges and 1.75% for everyone else.

Assuming a retiree meets minimum age requirements and doesn't elect options to take one-time lump sum distributions or to have a partial pension continue to a surviving spouse, someone with 30 years of service retiring from the state/school KPERS plan would collect 53% of FAS (30 times 1.75%); 35 years of service would generate 61% of FAS. There is no maximum years of service or % of FAS for members of the state/school plan. The maximum % of FAS for KP&F members is 80% and for Judges, it's 70%.

Unlike private sector retirement plans, KPERS benefits are not subject to state income tax. Since employee contributions are made after-tax, the portion attributable to employee contributions should be taxable but everything should be taxed as is done in the private sector.

KPI is releasing a KPERS study next week that shows total unfunded liabilities based on the current market value of plan assets is $9.3 billion, and even that is probably a low estimate. KPERS bases that $9.3 billion figure on plan assets earning an 8% return and is considering lowering the rate of return; they recently told the legislature that reducing the estimated rate of return to 7.5% would add another $1.3 billion in unfunded liabilities.

Unless there is substantial, long term reform of defined benefit plans like KPERS, governments like the state of Kansas will be soon faced with either imposing very large tax increases or cutting hundreds of millions in other spending.

You can find KPERS pension payouts for the last few years at http://www.kansasopengov.org/Retirees/tabid/793/Default.aspx

Bob_Keeshan 4 years ago

"Unlike private sector retirement plans, KPERS benefits are not subject to state income tax. Since employee contributions are made after-tax, the portion attributable to employee contributions should be taxable but everything should be taxed as is done in the private sector."

Employee contributions are made pre-tax. KPERS contributions are subject to the Kansas income tax. This is not true in the private sector, where pre-tax contributions are pre-tax for the state as well.

And what, exactly, does this have to do with retirement?

pittstatebb 4 years ago

It makes no sense for the state to tax the employer contribution to KPERS as the employer is the State of Kansas. It would theoretically cost the state more to tax the KPERS state contribution than to reduce the contribution by a similar amount, as there are cost associated with collecting taxes.

jafs 4 years ago

Not completely accurate - there are other employers who contribute to KPERS as well as the state.

So there are often 3 contributions - employee, employer, and state.

MyName 4 years ago

Actually, if you paid into an IRA using post tax money (a Roth IRA), then that money isn't subject to state income tax once you take it out after retirement either. It depends upon whether you've already paid the taxes on it or not.

Bob_Keeshan 4 years ago

Shhh, that doesn't fit into Mr. Trabert's Koch narrative.

Alceste 4 years ago

Nobody is "lying". As is typical of the "black/white" world some posters came from and still thrive in, the info said poster generates is "twisted".

In the interests of brevity I chose to not "copy and paste" all the intricies of the matter. Quibble over what is a "100% KPERS pension" all you like. Any fool with an iota of sense understands with KPERS the more years of service, the higher the benefit.

I believe the age qualifier is 55, thus my caveat. Look it up. Do some work for a change, eh?

What does "most" mean? Those who are presenlty receiving a KPERS benefit and have returned to work for a KPERS outfit are NOT paying into the KPERS fund. Thus, the suggested law impacts VERY FEW.....the chosen...those who have cronies that have given them employment (be same the joke of the "un-classified staff"; or the even larger joke of the "most qualified applicant interviewed" scam that exists in teaching in Kansas.) based not on skills but on brown nosing abilities.

Yes, what I've written leans toward the polemical. Big deal. It's a polemical "discussion." As well, those that do this double dipping are specious and unctuous. They're an integral aspect of WHY things just don't work in Kansas. Same old head bobbing, "Yassah Boss" jive that permitted them to keep their silly little jobs.

Let me provide an example: "...They spend the first sixty years of their lives in a place which had been stuck in the eternal mud and dust and wrapped all around so tightly with the earth of a continent that it takes several decades for a new idea to filter through to the people and several more decades for them to decide whether or not the new idea (which is old then) is sinful or not."

Dave Trabert 4 years ago

I don't believe anyone is 'lying'. There are minimum service and age requirements in order to qualify for 'full' or 100% pension benefits. If you don't meet those requirements, you get a reduced pension. That may be what Alceste is talking about. Note that I mentioned such requirements and said I was assuming those requirements were met.

So assuming that someone qualifies for full / 100% benefits, the formula I quoted comes from KPERS.

Now, to Bob's question regarding the applicability of KPERS benefits being tax-free for state income purposes. It's relevent because the tax-free status makes government pensions even more valuable. The cost of providing government employees with benefits that are far greater than private sector workers is neither justifiable or sustainable.

Bob_Keeshan 4 years ago

Mr. Trabert apparently believes KPERS benefits should be taxed twice. Conservatives refer to this as "double taxation". Perhaps Mr. Trabert is also a fan of the "death tax".

KPERS contributions are subject to state taxes. Private retirement contributions are not.

So KPERS benefits are not subject to state taxes, because the contributions were already taxed. Why are you arguing for double taxation?

Bob_Keeshan 4 years ago

"The cost of providing government employees with benefits that are far greater than private sector workers is neither justifiable or sustainable."

Not sure which government employees Mr. Trabert is referring to, but a Google search looking for a comparison of State of Kansas benefits to private benefits reveals a study from 2007 that shows Kansas benefits are slightly above the median of private sector benefits, but nowhere near "far greater".

Do you have any evidence for Kansas benefits being "far greater", other than some half-baked study from your own biased organization? Do you have independent validation, because this study was conducted by an independent group for what looks to be a special legislative committee. And it is right there on the state webpage.

Just like the information on KPERS and taxes that you are ignoring.

Bob_Keeshan 4 years ago

And perhaps Mr. Trabert would like to explain this from USA Today:

http://www.usatoday.com/news/nation/2011-03-01-1Apublicworkers01_ST_N.htm#table

Note where Kansas ranks -- public salaries + benefits are on average $3,229 less than private counterparts.

Oh noes, the facts don't fit Mr. Trabert's lies!!!

Alceste 4 years ago

Kapt. Kangaroo: Factor in the cost of living for the State Of Kansas vs. the rest of the USA on that? I rather doubt it.

Kansas is a hillbilly, redneck, filled with idiots State. As long as the "people" continue with allowing nonsense (as in "intelligent design"), what do you expect?

We live in a state where it is CHEAPER to buy whiskey than it is to buy food! hahahahahahahahahahhahahahahahahaaa

sammy 3 years, 11 months ago

Hey sunny, tired of hearing about the poor poor unemployed when the internet and newspapers are still full of jobs. That just doesn't make since. The whole thing is like this if someone wanted to be a teacher, work 9 months a year, have good benefits and eventually be able to draw KPERs at an early age and continue to teach guess thats what they should have went to school for and made their career instead of whining about it now.

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