The Republican chairman of the joint c ommittee on Pensions, Investment and Benefits, John Edmonds, said he abruptly ended the session before a vote could be held because he feared that if the measure had been brought to a vote, it would have failed, according to a Lawrence (Kansas) Journal-World report.
However, this action outraged Senate Democratic Leader Anthony Hensley. “This was truly a waste of legislators’ time and taxpayers’ money. Now we delay a decision to put the KPERS system back on solid ground. This is a poor way to conduct the state’s business,” Hensley said.
The question though surrounded how the Hensley-led state Democrats would have reacted to the proposal. Hensley said he supported the $500 million in pension obligation bonds if it were part of a comprehensive package for KPERS that included increased contributions from the state to the pension system.
But such guarantees could not be made. Under the original proposal, $500 million in pension bonds were set to be issued at a 6.25%. Pension managers say they could invest that money and earn more than what would be needed to pay off the bonds with the extra helping close the gap between the system’s assets and future benefits. On the other side, critics say the proposal amounts to a high-stakes gamble that could hurt pensioners because the investments could go sour, as they have in recent years.
Both sides agree though that something has to be done to shore up the state pension plan that has seen its asset/liability gap balloon to$2.8 billion, even as asset levels have increased to $9 billion from $8.2 billion on December 31, 2002 (See Kansas Pension Fund Faces Continued Liability Concern ). However, t he pensions committee must approve the proposal before it can be advanced to another committee that is composed of Governor Kathleen Sebelius and legislative leaders.
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