Reinvesting in the Backbone of Kansas

Guest blogpost by American Federation of Teachers — Kansas

The people of Kansas believe in service to others. At the American Federation of Teachers – Kansas (AFT-Kansas) we echo this commitment and work tirelessly to ensure that the State’s public employees and the communities they serve are given the best possible opportunities for stability, growth, and improvement. That’s why we’ve been at the front lines as Kansas weathered years of destructive tax policy and will remain there as our state rebuilds from this disaster.

Kansas lawmakers took a courageous and necessary step to restore the state’s fiscal stability by passing Senate Bill 30 in June. However, our ability to safeguard the long-term well-being of public employees remains threatened. Due to massive budget deficits created by Governor Sam Brownback’s failed 2012 tax experiment, the Legislature has repeatedly interfered with the state’s contributions to the Kansas Public Employee Retirement System (KPERS). Created in 1961, KPERS is a mandatory benefits program for Kansas employees [1] to make sure that our public employees—such as teachers, state troopers, and those at the KBI—can retire with dignity after a career of service to our communities. Around 1,500 state and local employers participate, providing nearly 300,000 members with a sense of financial security regarding retirement. [2] In a defined contribution retirement plan, employees contribute a portion of their monthly salary, which is then added with an employer contribution and individually managed.

Unlike defined contribution plans, KPERS participants contribute a portion of their salary with employer contributions, and the funds are collectively invested. When a public employee retires, their guaranteed monthly benefits from KPERS are calculated using a formula that considers the employee’s final average salary and their years of service. [3] Because an employee spends years contributing a portion of their salary to the fund, it is unfortunate that employer contributions have recently been recast as a political issue. In 2014, Governor Brownback reduced the employer contribution by $40.7 million. [4] In 2015, lawmakers approved $1 billion in bond sales to contribute to the investment fund. The bond sales were aimed at reducing KPERS’ unfunded liability – the difference between the total amount of money owed to beneficiaries and the amount of money available to be paid out. [5] During the 2016 legislative session, rather than reverse course on the Governor’s failed experiment, lawmakers delayed a $100 million payment into KPERS with the promise that the investment would be repaid with interest by 2018. [6] Despite important progress to restore the state’s fiscal stability, the 2017 Legislature was unable repay the delayed payment. [7]

After five years of fiscal crisis, including nine rounds of budget cuts since 2012, it will take time to restore fiscal stability to the state, rebuild crucial investments and return to meeting our commitments like contributing the state’s share to KPERS. Moving forward, lawmakers should make choices that fulfill the state’s promise to Kansans who chose to serve our state through public careers, including support for policies that stabilize the state’s pension program.


1 ‘KPERS’, KUMC Human Resources, http://www.kumc.edu/human-resources/benefits/kpers.html

2 “Stepping Soundly: 2016 Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016,”page 8, KPERS, https://www.kpers.org/annualreport2016.pdf

3 “KPERS Overview,” January 23, 2017, https://www.kpers.org/legislation/2017/KPERSOverview12317.pdf

4 Lowry, Bryan and Lefler, Dion. “Brownback moves money from highway fund, cuts pension spending to deal with $279M budget shortfall,” The Wichita Eagle, December 9, 2014, http://www.kansas.com/news/politics-government/article4382802.html

5 Koranda, Stephen. “Kansas Pension Plan Lowers Investment Forecast, Grows Shortfall,” kmuw.org, December 12, 2016, http://kmuw.org/post/kansas-pension-plan-lowers-investment-forecast-grows-shortfall

6 “Bills are coming due,” The Emporia Gazette, July 10, 2017, http://www.emporiagazette.com/opinion/editorials/article_5a181caa-dacf-5604-9397-7199d36f9df5.html

7 Desetti, Mark, “The Session is Over, But the Court Must Still Rule,” Under the Dome, June 12, 2017, http://underthedomeks.org/tag/kpers/

ClayReinvesting in the Backbone of Kansas