Gene Meyer at KansasReporter.org says the Kansas Public Employees Retirement System (KPERS) is in critical condition and has promised public employees $10 billion more in retirement benefits by 2033 than it currently has the money to pay. The defined benefit program promises public employees including teachers, police and firefighters a fixed monthly retirement check but the retirement fund’s investments must provide about an 8% rate of return to provide those checks.

Despite some recently improving investment returns, the so-called funded ratios that measure KPERS’ ability to meet future obligations with current resources all remain below an 80 percent level considered healthy by pension fund standards. Funded ratios for teachers and other school employees’ pensions — hit harder than the funds for state civil service workers or for local, city and county employees – have dipped to 49 percent and 52 respectively; anything below 60 percent is widely regarded critical.

The report says there are three ways to restore the appropriate actuarial balances without asking Kansas taxpayers to make up as much as $6.3 billion:

• Increase employee contributions deducted from their paychecks.
• Require employers to contribute more to the employee accounts.
• Reduce benefits to future employees.

Since the employers are taxpayer-funded government agencies, any increase in employer contributions would also come from taxpayers and would be an increase in spending unless agencies reduced spending in other areas.