Executive Summary

There are two primary constraints on the ability of the Kansas legislature to modify benefits under KPERS. The first is a statutory provision limiting the legislature's ability to modify "existing rights" of members. The second is the obligation not to violate the Contract Clause of the U.S. Constitution. Although taken in tandem these substantially constrain the legislature in its ability to make modifications to KPERS bene- fits, there are modifications that seem permissible, including:

• New hires: the reduction or elimination of benefits
• Possibly, the elimination of features not in place at the time of a member's hire, but only as applied to future benefit
accruals
• Possibly, the reduction or elimination of future benefit accruals for employees who have not yet vested under KPERS' terms
• Changes in future benefit accruals necessary to serve an important public purpose
• Insubstantial modifications to future benefit accruals
• Changes to future benefit accruals where added advantages offset the resulting disadvantages

The types of changes that could be made for new hires (see the first bullet above) would, for example, include eliminating or modifying the ability to purchase service credits, increasing the early retirement age, eliminating or modifying any rule of 85, increasing employee contribution rates, requiring more years to fully vest, increasing the age for normal retirement, increasing the number of years used in determining final
average salary, and not annualizing pay in calculating benefits for elected officials.

Any changes permissible under the second, third, and fourth bullets above, could probably be made with only respect to future benefit accruals. As to those future benefit accruals, the types of changes that could be made would, for example, again include eliminating or modifying the ability to purchase service credits, increasing the early retirement age, eliminating or modifying any rule of 85, increasing employee contribution rates, requiring more years to fully vest, increasing the age for normal retirement, increasing the number of years used in determining final average salary, and not annualizing pay in calculating benefits for elected officials.