Glenn Deck, executive director of the Kansas Public Employees Retirement System, told trustees last week that the teachers retirement system will not be adequately funded for many years, even if lawmakers approve measures they rejected earlier this year.
If the reforms are enacted, Deck said, the teachers fund would not reach an 80% funded level until 2018 at the earliest. Full funding would take many more years, he said.
The teachers fund is one of five pension systems in KPERS and the most severely under-funded one.
The 2010 Legislature voted down two proposals to increase contributions by the state and workers.
The teachers pension fund is currently funded at 56% of liabilities expected over the next 30 years. The funding for other plans in the system range from 64% for local government workers to 82% for state judges.
Deck said the funds need to generate $7.7 billion more than is expected over the next three decades, based on projected standard actuarial assumptions. However, Deck said, the unmet need goes to $9.4 billion when based on the actual market values of KPERS’ investments as of Dec. 31, 2009.
He said the unfunded liabilities must be addressed soon.
The trustees are expected to recommend changes in current contribution levels in December for consideration by lawmakers when they convene in Topeka Jan. 10 for the 2011 session.
Trustees are also looking into lowering the expectations for pension fund growth. The current model assumes an 8% annual increase in the value of investments, but the system investments actually lost 20% of their value in 2008.
If the lower assumption is adopted, Deck said, it would take longer for the funds to reach an adequately funded level.
