KPERS requests continued funding for $75 million modernization as funded ratio stabilizes near 75%
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Summary
KPERS staff told the Committee on General Government Budget the pension system’s operations budget for FY2026–27 holds largely steady while a five-year, roughly $75 million pension administration modernization project increases near-term operating costs; the system’s funded ratio is about 75% and trustees set employer contribution rates based on annual actuarial valuations.
Stephen Wu, a fiscal analyst with the Kansas Legislative Research Department, presented the Kansas Public Employees Retirement System budget and said the agency’s operating request for FY2026 is roughly in line with the legislature’s prior approval while the pension administration modernization project drives a modest increase in FY2027. "The budget before you represents the cost of operating and administering the KPERS system," Wu said, and he noted that employer contributions and benefit payments are recorded in other appropriations rather than the agency’s operating totals.
KPERS executive director Alan Conroy told the committee the system’s funded ratio — assets divided by liabilities — is "right at about 75%," a significant improvement from roughly the low 50s a decade earlier. "I think we'll be at 80% by around 2030," Conroy said, attributing progress to sustained legislative contributions, sale of pension obligation bonds, and required employer contributions.
The agency outlined four main expense categories: employer contributions/benefits (not in operating totals), investment management and consultant fees, the pension administration modernization, and general operations. Chris Holm, KPERS chief financial officer, provided budget detail: estimated FY26 benefit payments are about $2.5 billion (off-budget for operating), investment fees around $53.8 million in FY26 and $54.7 million in FY27, and administration operating requests of about $38.3 million in FY26 and $43.0 million in FY27. Holm said the modernization project will cost roughly $15.1 million in FY26 and $18.4 million in FY27 as it ramps through multiple iterations with vendor Tegret and various implementation work streams (data migration, employer reporting rollout, organizational change management).
Lawmakers pressed agency staff on mechanics and oversight. Representative Riley asked where independent audit costs and actuarial valuation work appear; staff said those are baked into administration program costs and that the annual actuarial valuation and board decisions (KSA 74-49-20 was cited) set employer contribution rates. On cybersecurity for the modernization, Holm said KPERS has a chief information security officer and is working with consultants and stakeholders to protect member data during migration. Conroy said some project hires are temporary and likely will not convert to permanent positions once the modernization completes.
The committee did not take formal action on KPERS’ request during this hearing; staff said they would stand for follow-up questions and provide additional detail if requested.