Budget proposal would cut scheduled contributions by $400 million over 3 years
Kansas Gov. Sam Brownback is proposing maintaining the state’s contribution to the Kansas Public Employees Retirement System at its fiscal year 2016 level over the next three fiscal years and extending the Topeka-based pension fund’s amortization period by 10 years.
Under Mr. Brownback’s budget proposal released Wednesday, the state would continue to contribute roughly $299 million to state/school employees, KPERS’ largest employee group, in fiscal years 2017, 2018 and 2019.
The state was previously scheduled to contribute $376.9 million, $462.6 million and $509.4 million in those periods, respectively. The 2018 and 2019 figures include roughly $24.9 million and $22.6 million in additional death and disability contributions, respectively. Under Mr. Brownback’s proposal, those amounts would be paid on top of the $299 million for a total of roughly $324 million in fiscal year 2018 and $321 million in 2019.
In light of the $17 billion pension fund’s decision in November to lower its assumed rate of return to 7.75% from 8%, Mr. Brownback is also proposing extending the period to pay off the fund’s roughly $9.4 billion in unfunded liability to 2043 from 2033.
Also under Mr. Brownback’s proposal, $97.4 million in deferred state pension contributions in fiscal year 2016 would not be paid by their June 30, 2018, due date to help bolster state revenues in 2018, according to the governor’s budget documents.
Shawn Sullivan, the state’s budget director, said in an email that the state faces budgetary pressures due to its tax collections, which “have been stagnant for the last three fiscal years and are only experiencing 0.3% growth.”
A KPERS spokeswoman could not immediately be reached for comment.