Despite passing pension reforms in 2013, legislators are considering making further tweaks to the Kansas Public Employee Retirement System. A House Bill, if passed, would reduce the annual interest credits public employees are set to receive from 2015 forward.
House Bill 2533 would decrease the interest rate that public employees receive on their contributions to the pensions to 4 percent from 5.25 percent. The rate of 5.25 percent was signed into law in 2013 and is scheduled take effect in 2015.
Rebecca Proctor, chairwoman of the Keeping the Kansas Promise Coalition, an advocacy group for public retirees, questioned why the legislators would want to change reforms that have not gone into effect during a hearing before the House Committee on Pensions and Benefits on Monday.
“We thought pension reform was done,” Proctor said. She said that further tinkering was a source of anxiety for those depending on the state pensions for their retirement. Proctor said that public employees essentially took a pay cut by making greater contributions to their pension funds under recent reforms, but that they did so to stabilize the pension fund.
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“We can’t get behind anything that lowers the benefit any more,” Proctor said.
She argued the committee should weigh “impact on communities where those employees live,” noting that retirees’ with stable pensions helped support local businesses across the state as consumers.
Rep. Jim Howell, R-Derby, the committee’s vice chairman, said the committee is not looking to cut benefits for existing employees. Changes would apply to future employees.
Secretary of Treasury Ron Estes said the plan offered an “upside” to public employees by ensuring that the pension fund would remain solvent in the future.
“I think this direction’s probably a much better approach to help us dig ourselves out of the hole we’ve been crawling into for the past 21 years,” Estes said.
Many public retirees have already fretted that the pension system could be where the Legislature will look to find extra funds if the Supreme Court hands down an affirmative decision in the school finance case. The Kansas Coalition of Public Retirees – including a chapter from Wichita – is scheduled to have a rally at the Capitol on Wednesday.