Kansas Gov. Sam Brownback budget proposal would achieve short-term savings by decelerating the state’s pension payment schedule, pushing full funding back by 10 years and raising long-term costs by $6 billion, according to retirement system officials.
The budget would also cancel the repayment of $97 million that lawmakers shifted out of the pension system in 2016.
Officials from the Kansas Public Employees Retirement System this week briefed lawmakers on the long-term consequences of the Gov.’s plan.
From the Kansas City Star:
Alan Conroy, the executive director of the Kansas Public Employees Retirement System, on Thursday briefed the Senate budget committee on the long-term impact of the governor’s budget proposal.
Brownback wants to slow down the state’s pension payment schedule to save money as the state faces a budget shortfall. Conroy compared that to refinancing the mortgage on your house.
“If you don’t pay it now, you’re going to pay more later and over a longer period of time,” he said.
KPERS has an $8.5 billion unfunded liability. If the state keeps its current payment schedule, it would pay that off by 2033. Brownback’s budget proposal would delay that by 10 years, which Conroy said would increase the long-term pension costs by $6.5 billion through 2043.