DALLAS The unfunded liability of the Kansas Public Employees Retirement System grew by $1 billion in fiscal 2013 to a total gap of $10.2 billion with market losses in the recent recession.
The system’s $13.1 billion investment portfolio posted a net return of 14% in fiscal 2013 and 14.5% in fiscal 2012 but that wasn’t enough to overcome deferred losses from a 30% drop in 2008, executive director Alan Conroy said at a session of a joint committee on pensions and benefits Sept. 5.
A proposal to issue $1.2 billion of taxable pension bonds to resolve some of the unfunded liability died in the legislature’s recent regular session. Increasing interest rates eliminated the potential benefit of such a cash infusion.
Deferred losses from the 2008 market plunge left KPERS with 56.4% of the funding it needs over the next 30 years, Conroy told the lawmakers. That’s down from a funding level of 59.4% at the end of fiscal 2011.
KPERS has realized an average rate of return of about 8% a year for the past 25 years, Conroy said.
Members of the pension system include more than 150,000 current workers and 84,000 retirees. The system covers employees of state and local governments and school districts.
The Kansas Legislature is meeting in special session to resolve a problem with state prison sentencing laws.
Kansas issued $500 million of pension bonds in 2004 rated Aa2 by Moody's Investors Service and AA by Standard & Poor's.
