Topeka 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.