Kansas lawmakers got their first look Tuesday at a proposal to create a 401(k)-style pension program for state employees. It was put together by a committee studying KPERS, which is under-funded by $8.3 billion.
Critics say Kansas can’t afford KPERS, which promises lifetime pensions at levels set by formula.
Given the Legislature’s past performance, the critics are right. It is far too easy for the lawmakers to skimp on the annual appropriations needed to keep a defined benefit program solvent; the temptation to yield to state employee unions when they ask for increases in pension payments is too great.
General Motors and other major corporations also dug themselves into bottomless pits with their generous — and wildly underfunded — pensions.
The 401(k) plan, which ties pensions to investment returns and makes no promises, is a solution.
Making the change won’t make KPERS solvent. It will take very substantial additional appropriations for years into the future to do that. But it will keep the hole from getting deeper.
It’s a bullet that needs biting.
Those already retired and those about to retire should get the pensions promised. New and recent employees should be switched to 401(k)s and perhaps have the opportunity to make additional contributions to their plans to earn richer pensions for themselves.
— Emerson Lynn, jr.
