Kansas’ pension contributions could increase $3.7 billion over the long term under a series of pension reform measures previously proposed by Kansas Gov. Sam Brownback, said Alan Conroy, executive director of the $16 billion Kansas Public Employees Retirement System.
To meet a projected $280 million budget shortfall in fiscal year 2015 and shore up the Topeka-based pension fund, Mr. Brownback proposed reducing employer contributions to KPERS by about $446 million in fiscal years 2015-2017, extending the amortization period by 10 years to 2043 and issuing $1.5 billion in pension obligation bonds.
Under Mr. Brownback’s proposal, the state’s contribution rate to state/school employees, KPERS’ largest employee group, would be reduced to 8.65% from a statutory rate of 11.27% for the last half of fiscal year 2015; to 9.69% from 12.37% for fiscal year 2016; and to 9.59% from 13.57% for fiscal year 2017.
However, these short-term contribution changes will result in a longer-term increase of $3.7 billion, a presentation Mr. Conroy prepared for the state House Appropriations Committee shows.
Mr. Conroy presented the data, provided by KPERS’ actuary Cavanaugh MacDonald, to the committee on Tuesday.As of Dec. 31, 2013, the pension fund had $9.8 billion in unfunded liabilities and a 60% funding ratio.
The governor’s proposals must be approved by the Kansas Legislature as part of the budget.