Gov. Sam Brownback last week signed a bill that aims to restore the long-term viability of the Kansas Public Employees Retirement System.
The legislation phases in a $28 million annual increase in the state’s contribution into the system over four years. In return, beginning in 2014, current employees also have to pay in more or face a cut in future benefits.
A 13-member commission will be appointed to determine if the state should offer a 401(k)-style retirement plan to new workers. Such a plan would replace the current system of basing benefits on salary and service length with one that ties benefits to investment earnings.
The bill is “a step in the right direction,” Brownback said.
“I look forward to working with the commission established by the new law to study whether the state should move toward a 401(k)-style plan,” he said.
KPERS has 161,000 active members, 43,000 inactive members, and 73,000 retirees. It paid $1.1 billion in benefits last year and received $780 million in contributions.