Archive for Monday, March 21, 2011

Kansas Senate to debate proposed public pensions fix

March 21, 2011


— A leader’s plan for tackling the Kansas public pension system’s long-term funding problems is balanced, but it remains part of a longer debate about retirement benefits for teachers and government workers, state senators said Monday.

Senate President Steve Morris said his chamber should debate a bill containing the plan this week. The measure would require most state employees to contribute a higher percentage of their salaries to the state pension system, but it would give many a boost in benefits. It contains the most aggressive proposal yet for increasing the state’s annual contribution to public employees’ benefits.

The bill sets up an 11-member study commission to consider even more sweeping recommendations for changes in the Kansas Public Employees Retirement System, or KPERS. Those changes could include 401(k)-style plans for teachers and government workers, though Morris has been reluctant to move in such a direction.

Morris, a Hugoton Republican, is also chairman of a special Senate committee on pensions, and the panel endorsed the bill unanimously Friday.

KPERS faces a projected $7.7 billion gap between its anticipated long-term revenues and the benefits it has promised public employees over the next few decades. A national report said last year that KPERS assets would cover 59 percent of its long-term liabilities, second-lowest of any U.S. state, behind only Illinois.

Sen. Laura Kelly, of Topeka, the ranking Democrat on the pensions committee, called Morris’ plan, “a great place to start the conversation.”

“Clearly, we have to do some restructuring at KPERS because the current system is not sustainable over the long haul,” Kelly said. “If you look at the bill, it’s very balanced.”

Public employee groups are resisting proposals that require them to make concessions. They strongly oppose efforts to move toward 401(k)-style plans that base retirement benefits on investment earnings and away from their traditional plans that guarantee benefits up front, based on salary and years of experience.

The Kansas Organization of State Employees is reserving judgment on the Senate’s plan for a study commission, but Executive Director Jane Carter said the rest of the bill represents the first proposal for addressing the pension system’s problems that it sees as reasonable.

“This is a very good effort to solve a really bad problem,” she said. “I think there’s been a good — a diligent — effort to make sure that we kind of stop pointing fingers.”

The study commission would make recommendations to the Legislature by December and give legislators until June 2012 to consider them.

’That’s why we formed the commission, to see what we can do further,“ said Sen. Ruth Teichman, a Stafford Republican and pensions committee member.

Morris’ plan would raise the state’s annual contribution to KPERS by $23 million, starting July 1, 2013. A plan before the House would increase the annual commitment by $10 million, also starting in 2013.

About 131,500 teachers and government workers covered by KPERS now pay 4 percent of their salaries to the pension fund. Under Morris’ plan, that would increase to 6 percent by 2016, though those workers would get a small boost in their promised benefits in exchange.

Another 20,000 employees, hired after June 2009, already pay 6 percent of their salaries into the pension fund, and they’ve been promised annual cost-of-living adjustments in their benefits after they retire. With Morris’ plan, they’d could keep the annual adjustments and pay 8 percent of their pay into the pension system, or forgo the future adjustments and pay 6 percent into the fund.

“We’re moving forward — we’re aggressive — on our funding problem with KPERS,” Morris said.

Morris’ proposal is in keeping with many state officials’ long-held views that Kansas law and previous court decisions prevent the state can’t go too far in forcing concessions from public employees.

The House plan goes against the convention wisdom. It would change how pension benefits would be calculated for teachers and government workers after July 1, 2013, giving them 20 percent less credit for each year of service after that date.


fairbro 4 years ago

A tiny increase in each worker's contribution to his own retirement pot of gold, a huge increase in their benefits when they retire, another increase in taxes to cover the $23 million, just this year, that Topeka supplementally adds to their pet workers' pension fund, this will solve the problem of promises unkept, unfunded liabilities? Sounds like these politicians are more arrogant and willfully ignorant than the ones in DC.

What a joke.

jafs 4 years ago

Any numbers to support "tiny increase" and "huge increase" in benefits?

pittstatebb 4 years ago

fairbro - if a 1% sales tax increase is a 19% increase, then a 2% increase in employee contribution is a 50% increase. We cannot play math games both ways. Any alternative plan that you would like to put KPERS employees on will either A) require a massive amount of cash influx in the short term, B) lose a court challenge, or C) require the state to force KPERS to declare bankrupcty.

fairbro 4 years ago

You pay 2% of your salary into your retirement fund? A whole 2%? Oh, you poor baby! You must be really feeling the pinch!

I always paid 10%, then when I retired I didn't have to worry.

Taffy3 4 years ago

So much for my plan to retire in 4 years.

Does anyone know if the legislators are in KPERS or do they have their own or nothing?

fairbro 4 years ago

Pitt, when you "pay" an increase to your own retirement fund, you are giving money to yourself.

When I pay sales tax, I am not giving money to myself.

Not only that, but I am giving money to you.

So you are gaining money either way, I am losing both ways. This is not a "math game."

notanota 4 years ago

When you are forced to pay an increase to your own retirement fund and subsequently see a deduction in your paycheck, you are not, in fact, giving money to yourself. You're seeing a net pay loss. KPERS is not a system of voluntary contributions.

When you enjoy the fine services of this community, such as citizens that know how to read and roads that are paved, know that you are, in fact, gaining something with your sales tax. You'd lose more by paying less of it, as would we all.

pittstatebb 4 years ago

You are indeed paying yourself with sales tax. There are many examples of such: exemptions/deduction on federal thus state income tax that are available because of sales tax, "free" fire, police, etc, roads that are not toll to drive on to and from work, etc.

The longer we think, the longer the list.

I am strongly for an increase in employee contribution (as a 4% payin does not equate to an ~50% FAS payout in my opinion). I would support changing the retirement age for new hires. I understand but am against lowering the multiplier to help keep KPERS solvent. However, attacking public workers benefits as pots of gold is not really going to sway me towards a 401k system that will leave retirees living a low quality of life in retirement.

notanota 4 years ago

"Morris' proposal is in keeping with many state officials' long-held views that Kansas law and previous court decisions prevent the state can't go too far in forcing concessions from public employees.

The House plan goes against the convention wisdom. It would change how pension benefits would be calculated for teachers and government workers after July 1, 2013, giving them 20 percent less credit for each year of service after that date."

"prevent the state can't go too far" "goes against the convention wisdom"

Do you guys actually hire copy editors anymore?

wastewatcher 4 years ago

NOTICE the Legislators are not doing anything to their own personal sweet pension plan. Why isn,t the special sweetheart deal exposed and corrected? Where is the ptress on this one?

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