STATE PENSION COALITION SAYS GOVERNOR’S LATEST DEFINED CONTRIBUTION PLAN A RISKY EXPERIMENT

March 19, 2013

(TOPEKA)–The following is a statement from Lisa Ochs, Chair of Keeping the Kansas Promise Coalition, in response to Governor Brownback’s latest risky experiment proposing to move the State’s public employee pension system (KPERS) to a defined contribution or 401(k) style system as presented to at a joint legislative hearing today.

 

“It is unfortunate that Governor Brownback is continuing to promote a risky defined contribution style approach for the Kansas Public Employee Retirement System (KPERS).  During the prolonged KPERS debate over the last year, one irrefutable fact has been made very clear: a defined contribution plan will cost Kansas taxpayers billions more in their hard earned money and put Kansas public sector workers at risk while only benefitting special interests. No secret junkets to meet with well connected special interests can change this fact.

 

It’s apparent the primary goal of the Governor’s latest scheme is to direct money out of KPERs towards tax cuts for millionaires and corporations. The Governor’s own budget document confirms this: “from changing those non-vested members with less than five years of service to the new system and the former statutory required KPERS payment would be used to eliminate the state individual income tax.”

 

The 2012 Legislature passed, and Governor Brownback signed into law, a new landmark cash balance reform measure that puts KPERS on a path to stability while also addressing the unfunded liability issue.  As the Executive Director of KPERS testified early this session before the House Appropriations Committee, the cash balance plan shores up the system and positions Kansas to extinguish the unfunded liability by 2033.  A defined contribution plan does nothing to address the unfunded liability issue.  If allowed to go into effect, the cash balance plan will ensure dedicated public employees, whether they be state road workers, local fire fighters, or school teachers a chance to have an adequate retirement they can count on.

 

KPERS retirees and their families deserve far more than to be used as ATMs for the Governor’s well-heeled friends.”

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