Advertisement

Archive for Monday, March 19, 2012

House gives preliminary OK to KPERS change for future hires

March 19, 2012

Advertisement

— The Kansas House on Monday advanced a bill that would set up new retirement plans for future teachers and other government employees.

Referring to the Kansas Public Employees Retirement System, state Rep. John Grange, R-El Dorado, said the proposal will "get us back on track."

Under the measure, teachers and other government employees hired after Jan. 1, 2014 would no longer participate in the current defined benefit plan that is based on salary and years of service.

Instead, there would be an option to choose either a "cash balance" plan, which would require employee and employer contributions and provide a specific return on investment, or a defined contribution plan, which is more like a 401 (k)-style system.

If approved on a final vote, the measure would then go to the Senate, which is working on its own plan.

Supporters of the overhaul say it is necessary to fill in a long-term funding problem with KPERS, which has been caused, in part, by years of inadequate funding from the state.

"Our hope is that 30 years from now, somebody will look back and say this is a great retirement program," Grange said.

But employee representatives oppose the measure because it would provide less in retirement benefits. Income replacement in the cash balance plan is expected to be from 30 percent to 35 percent of salary, while the current pension plan replaces 48 percent to 52 percent.

An amendment was approved that would allow gaming revenues to help pay down the unfunded liability for current KPERS contributors.

During debate, there was a move to amend the bill to make it easier to build a casino in southeast Kansas. But the amendment was struck down after it was declared that it was unrelated to the underlying bill.

An amendment was approved that would eliminate the part of the state pension law that allows legislators to use a 372-day annual calendar to calculate their retirement benefits.

Comments

Matthew Herbert 2 years ago

30 years frm now KPERS won't exist.

0

chootspa 2 years ago

"Our hope is that 30 years from now, somebody will look back and say this is a great retirement program," Grange said.

I weep for the world if this new plan is something people think is great 30 years from now.

0

Lynn731 2 years ago

I am against it, but it may reduce the state's ability to fail to fund their part, or rob money from the plan as they did from KPERS for years.

0

Michael LoBurgio 2 years ago

Comparing pensions

A legislator retiring with an annualized pay of $85,820.52, and with 10 years' service, would have an annual KPERS benefit of $15,018.60, for a monthly benefit of $1,251.55, according to KPERS. If the retiring legislator had 20 years' service, the annual benefit would be $30,037.20, and monthly, $2,503.10.

The News asked some KPERS retirees about their pension benefits. Their answers varied widely.

A state employee who was a supervisor for juveniles on probation retired after 34 years with an annual benefit of about $25,000. A municipal wastewater treatment plant superintendent, with 24 years' service, estimated the earned benefit at $2,300 to $2,400 monthly.

A state social services worker in a supervisory role retired in 1995 after 15 years and draws a monthly KPERS benefit of $524. That is equal to the monthly benefit for a county-level commercial appraiser who retired at 65, vested at nine years with KPERS.

'Insult'

Kathy Mendenhall, a public speaking instructor at Hutchinson Community College and past president of the Hutchinson National Faculty Association, had not been aware of the annualized pay formula for legislators.

"Oh, wow," she said.

0

Matthew Herbert 2 years ago

I asked to opt out of KPERS 7 years ago and was told I was being a bad "team player". Apparently an open acceptance and willingness to get screwed makes one a good "team player". The state government has no business being my involuntary investment banker. Big invasive government once again produces problems.

0

Charlie Bannister 2 years, 1 month ago

To correct some of you, SS is broke because so many politicians from both sides of the political aisle robbed from the SS Trust Fund and replaced the money with IOU's. This was done for many years. So now when SS starts running low they simply call in the IOU's, which are then paid back to SS out of regular federal budget funds, consequently going on our yearly deficit and increasing our national debt. See how that works? As far as the overhaul of the state retirement system, it should have been done long ago. If you think the state system was generous, check out how federal employees get paid on their pensions. Un freaking believable!!! THAT is the system that REALLY needs over hauling!!! There is an unfunded liability in the federal system of TRILLIONS of dollars!!!

0

Roland Gunslinger 2 years, 1 month ago

This will surely attract only the best and the brightest!

0

deec 2 years, 1 month ago

They forgot to add the option to NOT participate in the state's retirement plans, as many private-sector workers are allowed to do.

0

Gandalf 2 years, 1 month ago

Perhaps Government employees should join the public's retirement plan. It's called Social Security.

0

Commenting has been disabled for this item.