The difference between assets and liabilities had grown to $2.8 billion for KPERS, even as asset levels have increased to $9 billion from $8.2 billion on December 31, 2002. With the continued rise of liabilities, Kansas legislators are now weighing different options to curb potential negative downstream impacts, according to an Associated Press report.
This comes after the state legislature has implemented efforts during the 2003 session to increase state contribution rates to attempt closing the liability gap. Those attempts have gone relatively unnoticed since the $500 million in bonds the legislature authorized have not yet been issued.
Until something is done, the state’s pension liability will continue to grow. As of December 31, 2002, KPERS was funded to 77.6% of its liabilities for all of its workers and 75.6% for teachers and state workers – based on current contribution rates and an annual 8% return on investments.
Thus, legislators will continue to discuss the pension program, which has more than 240,000 members, with the goal of drafting solutions that can be considered during the 2004 Legislature. Among suggestions floated were:
- changing retirement eligibility
- increasing state contribution rates
- issuing additional bonds to cover the entire gap
- reducing benefits for future members.
However, each of the potential plans also has associated concerns, such as the state’s ability to devote a greater portion of its budget to KPERS at a time when there is little revenue growth.