Kansas House members were told last week that an increase in annual contributions would be the foundation for a fundamental reform of the Kansas Public Employees Retirement System.

The testimony was in support of the proposal as the first step in propping up the sagging system.

Currently, Kansas bases its KPERS contribution on 8.17% of a state employee’s salary.

The state can increase the rate by up to 0.6% a year, but the proposal would allow annual increases of up to 1%.

The system currently has an outstanding unfunded liability of $7.7 billion.

The liability was estimated at $8.3 billion by the end of 2008, but higher returns in 2009 reduced the gap by $600 million.

Director Glenn Deck said despite the recent improvement, “the system’s fundamental, long-term shortfall remains.”

Deck urged the House Pensions and Benefits Committee to establish “a more permanent foundation” for the retirement system.

The system’s trustees and an interim House-Senate committee overseeing the pension system favor the increased allowable, said Rep. Sharon Schwartz, R-Washington.

Schwartz said governmental contributions over the past 16 years were $2.5 billion less than recommended to meet KPERS’ actuarial projections.

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