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House committee advances modest tweak to KPERS' Capers 3 profit-sharing formula
Summary
Lawmakers in committee approved a change to the Capers 3 dividend-sharing formula that would shift the threshold and employee share of excess returns; supporters said it's an affordable improvement, critics warned of long-term fiscal costs.
A measure that adjusts how Capers 3 retirement plan members share investment returns cleared the Committee of the Whole after debate over fiscal consequences.
Representative Jared Poeheisel, the bill carrier, said the change does not reclassify members into a different retirement tier but adjusts the formula for distributing investment gains to Capers 3 accounts. Under current law Capers 3 participants receive a guaranteed 4% interest plus 75 percent of returns above 6 percent; the bill would change the threshold to 5 percent and increase the participants' share of excess returns to 80 percent.
"We're going to go down and say, okay, anything above 5 percent, and we're going to give you 80% of of that excess revenue to our employees," Poeheisel said. "This will, on average, be a boost of about 10% to future Capers 3 accounts."
Opponents and skeptical members said the change has a measurable fiscal implication for employer contributions and long-term amortization. Representative Wagner told the Committee the bill carries a total fiscal note of about $107 million when fully calculated across the plan's amortization schedule.
"This bill does have a fiscal note. It is, in totality, dollars 107,000,000," Wagner said, urging caution about adding long-term obligations while the state budget is under pressure.
Supporters, including representatives from rural and education districts, argued the tweak is targeted and helps recruit and retain employees in occupations covered by Capers 3.
The Committee adopted the committee report and the measure was reported favorably to the full House.
Ending: The bill was advanced to the House calendar; if enacted, the change would be prospective and not retroactive to past service, according to the bill explanation in committee.
