DALLAS - Kansas Public Employees Retirement System has achieved the 60% funding threshold for its pension fund, an actuary told the KPERS board of trustees.
Under the Standard & Poor's medians for state pension funds, those below 60% are in the lowest category, followed by those in the 60% to 80% rankings. Those funded at 80% to 90% are the second highest, with those above 90% at the top. Six U.S. states achieved the highest ranking in S&P's June 25 report.
With the climb to the 60% threshold, Kansas joins its neighboring states in the third-highest category.
As of Dec. 31, 2013, KPERS had total funds of $15.7 billion on a market value basis, according to the actuarial report sent to the KPERS board of trustees on July 8. That represented an increase of $1.9 billion from the previous year's $13.8 billion.
The state's unfunded actuarial liability fell by $487 million to $9.766 billion at the end of 2013, largely due to a $653 million gain on assets, according to Patrice Beckham, an actuary with the consulting firm of Cavanaugh Macdonald.
KPERS' funded ratio at the end of 2012 was just 56%, according to the report. S&P's median for all the states in 2012, the most recent year in its June 25 summary, was 65.8%. S&P rates Kansas AA-plus with a stable outlook. Moody's Investors Service downgraded the state to Aa2 from Aa1 on April 30.
KPERS market value hit bottom in 2008 with a 30% decline but then rose more than 20% in 2010, the last time KPERS was above 60 percent funded, according to Beckham's presentation.
The pension system's unfunded actuarial liability, or projected debt, dropped by nearly $500 million in 2013 to $9.8 billion, Beckham said. The system had not been below $10 billion in unfunded liability since 2011.
The state's pension system improved in part because of a 17% investment return last year, well above KPERS' long-term assumption of 8%.
In 2012, Kansas passed legislation creating a cash-balance plan that will take effect for new employees in January.
