TOPEKA - Future employees in the Kansas Public Employees Retirement System and those who aren't vested by July 2013 would have 401K-style investments that grow and shrink with the markets under a plan recommended by the KPERS Study Commission on Tuesday.

Sen. Jeff King, a Republican from Independence who co-chairs the commission, said his proposal is the first step of a long process that aims to ensure that the Legislature funds benefits for teachers and government workers and doesn't create the massive liabilities lawmakers are grappling with now.

The recommendations, approved in 8-3 votes, change nothing for vested employees - those with at least five years of service - and do little to address the $8.3 billion shortfall the system faces. The commission meets again today to discuss plans for vested employees and ways to deal with the shortfall.

KPERS provides about 260,000 current and former employees retirement plans that guarantee benefits based on a formula instead of market returns or member contributions. The system has more than 150,000 active members with an average salary of $40,024. The retirement system serves 25,737 state employees, 84,438 school district workers and 40,307 local government employees.