This morning we covered two fronts of the Brownback War on the Middle Class (tax hikes targeted at the working poor and capping the state’s investment in education) and this afternoon we will bring you a little news on one more: KPERS.
This is one of the biggest budget issues the Legislature will have to wrestle with in the near future. How they decide to dig out of the hole they dug over the last decade and a half by not fully funding the state pension system has massive implications not just for state employees, but also for city and county employees, teachers, workers in the Regents system, and of course for retirees of any of those lines of work.
The Governor tasked a commission with coming up with a way to meet the commitments that have been made to employees over the years, and that Commission produced a recommendation that will be debated this session.
Unfortunately, the King Plan won’t actually do anything to help the state meet those commitments.
Instead, it will just force KPERS members with less than 5 years of service and all future KPERS members to move from a defined benefit plan – basically a guaranteed retirement plan to make up for the undermarket pay they took home during their career – to a hybrid defined contribution 401(k) style plan.
And what could possibly go wrong with letting Wall Street investment bankers determine the future solvency of the retirement plan our numerous public employees will depend on in coming years?
There is also the small matter that the King Plan costs more to implement than the current system. Oh, and did we mention that the King Plan does nothing to address the unfunded liability of the current system? Well, just to be clear: it doesn’t.
We’ll be keeping an eye on this one as well throughout the session but check out KeepingtheKansasPromise.com if you want to know more about what is happening on the KPERS front.
