HEADLINES : Kansas

Analysis: Pension woes likely to linger

The Topeka Capital-Journal | by John Hanna | December 5, 2011

Kansas anticipates tripling the tax dollars it contributes over the next two decades to pensions for teachers and government workers, and questions about whether taxpayers can afford such a commitment hang over the debate about the state retirement system's future.

A commission created this year to consider changes for the Kansas Public Employees Retirement System is grappling with the knowledge that whatever it proposes, closing the system's long-term funding gap is likely to squeeze the state budget for years. The commission is scheduled to meet Wednesday and Thursday to decide what proposals to forward to legislators next year.

Commission members expect to consider proposing a 401(k)-style plan for new public employees. Gov. Sam Brownback and conservative Republican allies in the GOP-controlled Legislature argue the state's current commitments show it can't sustain traditional plans. Critics, including public employee groups, contend starting a new plan will incur costs and still won't close the long-term funding shortfall in existing plans.

KPERS projects that it faces an $8.3 billion shortfall between anticipated revenues and the benefits promised through 2033 to retirees and current workers. The system's plan guarantees benefits up front, based on an employee's salary and years of service, rather than having those benefits depend upon investment earnings, as 401(k) plans do.

 

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