Activists object to delaying $58M in state payments into system
Posted: February 4, 2015 - 1:14pm
By Tim Carpenter
Dozens of Kansas pension system beneficiaries rallied Wednesday to denounce Gov. Sam Brownback's recommendation to slash state contributions to the system in response to a budget shortfall.
Withholding $58 million this year in scheduled state payments to the Kansas Public Employees Retirement System would delay by 10 years until 2043 the projected break-even point for the pension program. Under Brownback's strategy, employee contributions into KPERS would not be postponed.
The Republican governor also urged the 2015 Legislature to authorize issuance of $1.5 billion in bonds to provide investment capital to KPERS' portfolio. Trustees of the system would invest borrowed cash with the goal of generating long-term profits while also paying off bond obligations.
Dennis Phillips, chair of the Kansas Coalition of Public Retirees, said lawmakers had a responsibility to deliver financial certainty to 280,000 Kansas teachers, judges, firefighters and others participating in the retirement program. Sidestepping state payments to KPERS doesn't make sense, he said.
"We need your support," Phillips said told retirees. "The governor wants to remove $60 million from KPERS this year. It is real money."
"How many more of these payments will be deferred?" said Rep. Ed Trimmer, D-Winfield.
House Minority Leader Tom Burroughs, D-Kansas City, said actions undermining integrity of the system betrayed people who dedicated themselves to government service.
"Your pension plan, KPERS, was our commitment to your for standing up and taking these jobs," he said.
On Wednesday, the House sent to the Senate a bill intended to address a $340 million shortfall in the fiscal year ending in June. If state tax collections don't exceed expectations over the next five months, legislative researchers said, the House package would be insufficient to eliminate the deficit.
Kansas Treasurer Ron Estes has endorsed Brownback's plan to issue bonds and delay for a decade closing of the multibillion-dollar unfunded liability in KPERS.
The state's budget deficit of more than $700 million in the current and next fiscal years requires acceptance of this "reasonable burden" by taxpayers, Estes said.
In 2012, the Legislature and Brownback overhauled KPERS to raise state and employee contributions to the system. That law created a hybrid cash-balance plan for new KPERS' members after Jan. 1, which diverges from the established defined-benefit program and fell short of the 401(k) model sought by GOP legislators.
Tim Carpenter can be reached at (785) 295-1158 or firstname.lastname@example.org.
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Retirees rally at Capitol against KPERS reformsPrint Page