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KPERS revamp; Although there is no bill yet, local lawmakers anticipate changes in the Kansas Public Employee Retirement System.
Although they only have generalities at this point, local lawmakers are anticipating big changes in the Kansas Public Employee Retirement System.
Rep. Caryn Tyson, R-Parker, and Sen. Bob Marshall, R-Fort Scott, held a KPERS forum Saturday at Fort Scott High School auditorium to inform those attending about the proposed revisions and take questions. About 22 people attended.
Commonly known as KPERS, its mission is to provide retirement, disability and survivor benefits to members and their beneficiaries. It administers three statewide defined benefit plans for public employees -- the Kansas Public Employees Retirement System, Kansas Police & Firemen's Retirement System and Kansas Retirement System for Judges.
But due to decisions made "long before" Tyson and Marshall got to Topeka, they note, KPERS' future is in doubt, and the program needs revision.
"Most of the presentations we've had have been general. We don't have a bill yet. That's what we have in the capital right now. Everything is just generalities," Marshall said.
Under the current system, KPERS is a defined benefit plan, meaning it promises a certain monthly benefit based on earnings history, age and years of service.
This would switch to a defined contribution plan where employees would chip in more toward their retirement, and their return would depend more on the stock market, like a 401K or Individual Retirement Account.
House Bill 2194, passed last session, will become effective Jan. 1, 2014, if the legislature acts on bills recommended by the KPERS Study Commission. The commission included House and Senate members and business leaders, Marshall said. The study commission recommendations are also referred to as the King plan, named for Sen. Jeff King, R-Independence.
"If you're in Tier I, you'll stay where you are. If you're a new hire or not vested, you'll fall under the King plan," Marshall said. He added the plan would eliminate or control double dipping where educators retire from one district and go to work for another.
Tyson said the main goal is not to rock the boat too much for people who have been in the system for a long period of time.
However, "everything is on the table," Tyson said.
"This is all up for grabs. The only thing we know is House Bill 2194 has passed. We absolutely won't know anything until later in the session," she said.
"Turnaround (when most bills have to clear their legislative house of origin) is in February, so by then it has to be in the opposite chamber," Tyson said.
Another forum like Saturday's is in the works for Prairie View. Tyson said she would get that information to those concerned as well.
Glenda Lalman, a former USD 234 secretary who now works for Mercy Health Center, said she's already drawing her retirement, so she should be safe. But if she was a new employee, "It would be very scary because of the economy."
Fort Scott Community College President Clayton Tatro said what he heard was "pretty much what I'd known before."
FSCC has about 150 employees at its Fort Scott, Crawford and Miami County campuses.
"For us at the college, this was pretty much of an overview of what's passed. It's important for us as employers to anticipate changes for new employees as well as existing employees," Tatro said.
Some KPERS information
Despite strong investment returns the past two years, the Dec. 31, 2010, actuarial valuation shows a modest funding decline and that the long-term funding shortfall will continue to grow in the near term.
The additional employer and employee contributions and plan design changes included in House Bill 2194 are a meaningful step toward improving the system's long-term funding outlook and reaching actuarially required contribution levels.
The impact of these additional contributions in improving the funded ratio and other measures of the funded status will be limited in the next 10 years. As a result, the system is vulnerable to future economic downturns that cause investment returns to decline.
KPERS' mission is to provide retirement, disability and survivor benefits to members and their beneficiaries. It administers three statewide defined benefit plans for public employees -- the Kansas Public Employees Retirement System; Kansas Police and Firemen's Retirement System; and Kansas Retirement System for Judges.
It partners with 1,499 state and local government employers including the state of Kansas; 293 school districts; 105 counties; 474 cities and townships; other employers including libraries, hospitals, community colleges and conservation districts.
It is governed by a nine-member board of trustees and has an 85-member staff.
Source: Information provided at KPERS meeting on Saturday at Fort Scott High School.