When we think of the bedrocks of our community we conjure up images of our public safety workers, our snowplow drivers, our teachers, and our law enforcement officials. Like all Kansans, these workers ought to expect a secure retirement that allows them to live modestly into old age. And for more than 50 years, the Kansas Public Employees Retirement System (KPERS) has played a critical role in ensuring that these Kansans are able to retire with dignity after their years of service.
Recent reforms to KPERS enacted by the Legislature in 2012 put Kansas on a solid path for the future that will ensure retirement security for hundreds of thousands of Kansans. Legislators took important action to require greater responsibility from both employees and employers that will ensure a sustainable commitment to our retirees . Both parties came to the table and agreed that mutual sacrifice was the best way to put our state’s retirement system on solid footing. Those changes to KPERS have already proved to be smart fiscal moves, as we have witnessed in the past year. Alan Conroy, executive director of KPERS, underscored that sentiment recently by stating, “With continued strong investment returns and the positive effects of last year’s benefit change legislation, KPERS is on a clear path to financial soundness. Projections show the actuarial liability will be paid off by 2033.” Yet there are those who advocate for more drastic changes to the retirement system—changes that could prove detrimental to both employees and Kansas’ taxpayers.
Instead of giving the 2012 changes the time to take effect and deliver the financial soundness that Kansans deserve, a small group of special interests and their legislative allies would prefer to slash the state retirement system entirely and force all employees into a risky 401(k)-type plan that would cut retirement benefits while creating new costs to taxpayers. If we took the advice of this group, Kansas taxpayers would be paying more for less; I call that a bad deal. Those who advocate for a 401(k)-type plan fail to address the system’s funding shortfall altogether—which the 2012 legislative fix adequately addressed and corrects—and instead want to start digging another hole for the state.
They also ignore the strong body of evidence coming from states across the country that “fixing” pension systems by converting them to 401(k)-type plans lead to state budget quagmires. Case studies from other states demonstrate how such an overhaul is damaging and unaffordable for both public employees and taxpayers. Alaska and Michigan saw their pension debts increase when they switched their public employees over to a 401(k)-style plan, while independent actuaries found that a 401(k0)-style proposal in Pennsylvania would cost nearly $47 billion. In West Virginia, after 15 years of administering 401(k)-style plans for their public employees, a report found that many were eligible for means-tested public assistance because they had received such little in retirement income. This ended up driving up costs for the state, and forcing the state legislature to finally revert back to a traditional pension plan in 2006.
Without a doubt, the recent changes to KPERS have put us back on a path to a secure future. Now is not the time to abandon these important reforms, particularly not for an approach that increases both risk and cost. Let’s protect retirement security, let’s allow people to retire with dignity, and let’s reject the recent attacks on public workers. Let’s stay the course on KPERS!