Kansas City, Mo. – The Pew Center for the States finds that state pension funds have promised retirees $1 trillion more than they have on hand to pay. Missouri's pension system is in relatively sound shape, but the one in Kansas is among the most troubled in the nation.
The Kansas pension system, KPERS pays out more than a billion dollars a year to former state and local workers. That figure grows all the time, but the pool of money available to pay out doesn't. With the market crash in 2008 those investments lost billions, but KPERS spokeswoman Kristen Basso says the trouble started long before.
"The state has not been funding it all along for at least 15 years, and then you add on top of that creating benefit increases that are not paid for, and then you add on top of that investment losses, and it snowballs into the effect that we have right now."
And then you add on top of that a wave of baby boomers about to retire earlier and live longer than any previous generation, and you're looking at a big adjustment. It could be, higher contributions from employers and workers, cuts in benefits or replacing KPERS with a mandatory 401k-type system. Legislation's possible by the end of the year.