TOPEKA — A proposal to attack the long-term funding problems facing the state pension system without starting a 401(k)-style plan for new teachers and government workers won approval in the state Senate on Monday.
The 31-7 vote sent the bill to the House, where a vote is expected today . That would send the measure to Gov. Sam Brownback.
But legislative leaders weren't sure the House would approve the compromise proposal, because most members of its Republican majority favor moving the state toward a 401(k)-style retirement plan for public employees. The House's rejection would require it to reopen negotiations with the GOP-controlled Senate over pensions legislation.
The Kansas Public Employees Retirement System projects a gap of $7.7 billion between its anticipated revenue and benefits promised to teachers, judges, police, firefighters and other government workers through 2033.
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The compromise bill boosts the state's annual contributions to the system, starting in July 2013, phasing in a $28 million annual increase over four years. It requires public employees to choose between paying a higher percentage of their salaries toward their retirement benefits or having their future benefits cut. It sets up a commission to study whether the state should move toward a 401(k)-style plan.
"This is only a partial solution to the problem plaguing KPERS, but it is a vital partial solution," said Sen. Jeff King, an Independence Republican who was his chamber's lead negotiator on pension legislation.
The House had approved a bill that would have mandated a new 401(k)-style plan for teachers and government workers hired after June 2013. Other employees could have joined the new plan or faced a cut in their future benefits. The Senate approved a plan to set up the study commission, with legislators voting next year on the panel's recommendations.
The compromise — preserving the study commission — emerged from negotiations between three senators and three House members, and it had bipartisan support in the Senate. But some Republicans argued that the state should be more aggressive about moving toward a 401(k)-style plan for public employees.
House GOP leaders didn't know whether such sentiments would doom the compromise plan. House Pensions and Benefits Committee Chairman Mitch Holmes said he's heard some grumbling but can't say how widespread it is.
Brownback favors moving toward a 401(k)-style plan for new public employees, and he has expressed confidence that it will happen.S