Thu February 20, 2014
Bill Would Change Kansas State Worker Retirement Plan
A committee in the Kansas Legislature is considering a bill that would overhaul the state's retirement system.
The Kansas Public Employees Retirement System, or KPERS, covers thousands of state workers and local government employees like teachers. The proposal would switch KPERS to a 401(k)-style plan where employees manage their retirement benefits.
Currently, KPERS is a pension that pays benefits to a worker based on their salary and years of service. Right now, there's about a $10 billion long-term shortfall.
Representative John Rubin, a Shawnee Republican, says switching to a 401(k)-style plan would mean workers would handle the risks, and benefits, from the market. That would take away the risk to the state in future economic downturns.
"This bill is what I believe will be necessary to save KPERS, and make sure it will be able to meet its future obligations," says Rubin.
The state has already passed some KPERS changes, which are estimated to eliminate the shortfall by 2033.
Some critics of Rubin's plan say it would cost the state more than sticking with the fixes that have already been passed. Rebecca Proctor is with the group Keeping the Kansas Promise.
"We have a fix that was passed in 2012 that is on the eve of taking effect. Now is not the time to change course," says Proctor.
The changes would affect new public employees hired after the beginning of 2016.