The House voted late last week to accept the Senate’s plan to more fully fund the Kansas Public Employees Retirement System.
Public school teachers, state and local government employees, and others in the 250,000-member plan will determine in 2013 if they want to increase their contributions or opt for a less-generous pension plan.
The law also creates a 13-member commission that will provide the 2012 Legislature with a more fundamental plan to boost funding for KPERS.
The state pension plan currently has an unfunded liability of $7.7 billion for promised benefits between 2012 and 2033.
Other estimates of the unfunded liability range from $9 billion up to $12 billion.
Rep. Mitch Holmes, R-St. John, failed in his attempt to offer a self-funded pension plan but said he hoped the pension commission would recommend a similar option.
Holmes said the modified 401(k) plan would protect the state from future unfunded liabilities, but would not close the current funding gap.
The 131,000 members of the pension plan hired before July 2009 will be able to raise their contribution level to 6% of annual salary to retain current benefits, or keep their contribution at the current 4% but receive lower benefits.
Employees hired after that date now contribute 6%, but will be asked to give up automatic cost of living increases or accept lower benefits.
