H Sub for HB 2333

After several revisions, a final draft of House Substitute for HB 2333 has finally appeared for review in the Legislature. As drafted, the legislation would:

• Decrease the multiplier on final average salary for all service credits earned after July 1, 2012 from 1.75% to. 1.4%;

• Increase the state’s annual contribution increase cap from .6% to .8%; and

• Apply 50% of the proceeds from the potential sale of any state assets to reduction of the KPERS unfunded actuarial liability (UAL).

The original HB 2333 would have increased the retirement service credits for Tier I KPERS member from 85-points to 95-points. After the first round of amendments to HB 2333, the bill would have piggybacked the retirement age to the Social Security retirement age beginning in 2016 (expected to be 67). However, after receiving numerous constituent contacts, the House Pensions & Benefits Committee met again to remove that provision.

It has been the position of the Coalition for Keeping the Kansas Promise that H Sub for HB 2333 violates the Contract Clause of the United States’ Constitution. KPERS members have been determined by the Kansas Supreme Court to have a contract with the state of Kansas, and any “changes which result in disadvantages to the employees must be accompanied by offsetting or counterbalancing advantages.”  Singer v. City of Topeka, 227 Kan. 356, 366 (1980).

The amendments made to the measure on March 14, 2011 don’t change this position: the amended H Sub 2333 still reduces the multiplier without offering any “offsetting or counterbalancing advantages.”