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Interim report urges $1 billion state payment to KPERS, further study of retirement issues
Summary
A joint interim report recommended the House Appropriations and Senate Ways and Means consider a $1 billion transfer to the Kansas Public Employees Retirement System (KPERS) and asked the financial institutions committee to continue studying retirement program design, COLAs and DROP options.
Mike Ditch of the Legislative Research Department briefed the committee on the Joint Committee on Pensions, Investments and Benefits interim report, which reviewed KPERS investment policies, HB 2711 implementation and other pension‑related topics.
The report recommended that the House Committee on Appropriations and the Senate Committee on Ways and Means consider transferring $1,000,000,000 from the State General Fund to the KPERS fund to reduce the system’s unfunded actuarial liability. The report also urged ongoing review by the Committee on Financial Institutions and Pensions and the Senate committee on insurance and financial institutions of several issues: the Deferred Retirement Option Program (DROP) including pros and cons of expansion; cost‑of‑living adjustments and their fiscal impact; and potential enhancements to the KPERS Tier 3 cash balance plan, with the recommendation that any changes be financed at enactment and not increase unfunded liabilities.
The report noted implementation activity related to 2024 HB 2711, which addressed post‑retirement work rules, lump‑sum death benefits and a new divestment requirement described in the report as the Countries‑of‑Concern Investment Act; following that law, the retirement system identified and liquidated holdings in 12 securities from 10 companies subject to divestment under the statute.
The committee did not propose new legislation but recommended continued study and consideration of fiscal options to strengthen the pension fund’s funding status.
