Kansas Public Employees Retirement System's $13 billion defined benefit plan will be closed to state employees and teachers hired after Jan. 1, 2015, under a bill approved Thursday by the Kansas Senate and House.
The Senate passed the measure 35-2 and the House approved it 74-42. Gov. Sam Brownback is expected to sign the bill after releasing a statement of support earlier this week.
The bill does not apply to participants in the $1.7 billion Kansas Police & Fire Retirement System, Topeka, which is part of KPERS.
The bill also sets up a cash balance plan within KPERS for employees hired after that date, but an earlier provision passed by the House in March would have allowed future employees to choose a defined contribution plan instead of the cash balance plan. Also removed was a House bill provision setting the effective date as July 1, 2014.
State Sen. Laura Kelly, who was on the committee that reconciled the House and Senate bills, said in a telephone interview that the defined contribution option was too costly, left retirees at the “whim of the markets” and did nothing to pay down Topeka-based KPERS' unfunded liabilities. The DB plan was 62% funded as of June 30.
The bill also states that casino revenues from the state's Expanded Lottery Act Revenues Fund will be used to help pay down KPERS' unfunded liabilities. KPERS will receive $10.5 million from the fund as well as 50% of remaining revenues.