2011 HOUSE BILL 2194 STILL THE MOST ECONOMICAL SOLUTION TO KPERS REFORM
In 2011, the Legislature passed House Bill 2194, which requires the state to meet its employer contribution and modestly increases rates for Tier I and Tier II members and new employees coming into the system in exchange for cost-of-living-adjustments and an increase in the retirement benefit formula multiplier for all future years of service. The bill would address the KPERS unfunded liability by year 2035 and continue to guarantee adequate retirement benefits for KPERS members through the current defined-benefit system.
A provision of the bill, requested by the Governor, prohibits the other provisions of HB 2194 from going into effect until the Legislature votes on the plan developed by the KPERS Study Commission. Unless both chambers of the Legislature vote “up or down” on the Study Commission’s plan, HB 2194 will be stricken from the books.
As you recall, the KPERS Study Commission proposed moving KPERS to a costly defined-contribution system that failed to address the unfunded liability and scaled back benefits for KPERS members. The Senate KPERS Select Committee voted down the Study Commission plan, but the House has refused to take any action that they feel might trigger the provisions of HB 2194.
Unfortunately, legislators have chosen to ignore the fact that 2011 HB 2194 is still the most economical plan for the state. It addresses the unfunded liability and costs far less than any other plan currently being discussed in the Legislature. Cost projections provided by the KPERS own actuary, Cavanaugh Macdonald Consulting, LLC, bear this out.
HB 2194 vs. Study Commission Plan (2012-2060)
Total Cost (HB 2194) = $22.1 Billion
Total Cost (Study Comm) = $33 Billion
DIFFERENCE – $10.9 BILLION
HB 2194 vs. Cash Balance Plan (2012-2060)
Total Cost (HB 2194) = $22.1 Billion
Total Cost (Cash Balance) = $30.1 Billion
DIFFERENCE – $8 BILLION
As we have suggested before, it appears the effort to move KPERS to a defined-contribution plan isn’t based on fiscal responsibility, but on an ideological desire to follow the failures of the private sector and shift all the risk from the state to retirees.
As the Legislature begins their annual wrap up session, it is not too late for them to do the right thing. Call or write today and let them know that you expect fiscal responsibility and common sense to guide these important decisions.
CORPORATE FRONT GROUP AMERICAN LEGISLATIVE EXCHANGE COUNCIL BEHIND PENSION SCHEMES IN OTHER STATES…
IS INFLUENCE BEING FELT HERE IN KANSAS?
The American Legislative Exchange Council (ALEC), an organization funded by Wall Street insiders and corporate special interests, has come under fire lately for their controversial “model legislation” and extreme agenda being pushed in Legislatures across the nation. Recently, numerous major corporations, including Pepsi, Kraft Foods, Coca-Cola, McDonald’s and the Bill and Melinda Gates Foundation, have announced they have had enough and are severing ties with the controversial organization.
Only recently has the public learned the extent of ALEC’s agenda. For nominal membership fees, state lawmakers attend all-expense paid meetings at lavish locations where ALEC corporations hand state lawmakers “model legislation” that directly benefits their profit margins, usually at the expense of hard working middle class families. State lawmakers then introduce bills, without disclosing they were written by ALEC, such as pension schemes, major tax loopholes, privatizing public education and state programs.
This month it was revealed the group held secret meetings with members of the Louisiana Legislature to help orchestrate and influence legislation to slash pensions for Louisiana state workers. This prompted the Louisiana State Chairman of ALEC, Rep. Greg Cromer, to resign from the group.
Here in Kansas, according to the Lawrence Journal World (see link below), as many as 23 Kansas state lawmakers attended the last annual ALEC meeting, including several of the key players involved in the KPERS issue. So, is ALEC influencing the debate on KPERS? We may never know for sure, but here’s to hoping our lawmakers listen to KANSAS teachers, firefighters, cops and other state and local workers instead of Wall Street insiders.
Corporations drop memberships in ALEC, which has strong ties to Kansas Legislature