Legal Authority Exists to Adjust KPERS Benefits
New Paper Shows Kansas Has Legal Standing To Adjust Pensions
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July 14, 2011 - Wichita, KS - There is a mounting realization that the Kansas Public Employee Retirement System (KPERS) is facing a crisis and there is a need for immediate reform. "Legal Authority to Adjust State Pension Plans," a paper released earlier this week by KPI, outlines the legal history of modifying public pension benefits. Ralph Benko, a senior economic policy advisor to American Principles in Action, authored the paper and participated in a media conference call on July 12 announcing the paper's release. An audio recording of that conference call is available here. It will be mailed to members of the Brownback Administration, the Kansas Legislature, and the KPERS Study Commission later this week. KPI released a paper earlier this year outlining the staggering unfunded liabilities facing KPERS that can be viewed here.
"Exorbitant retirement benefits are threatening the ability of states and municipalities to deliver essential government services, and, in up to 20 states and hundreds of municipalities, are threatening their very solvency," writes Benko. "There is a widespread misunderstanding in many states that the U.S. Constitution prohibits [adjusting pension obligations], but there is no such prohibition."
You can listen to an unedited audio transcript of media conference call by clicking here.
A full copy of "Legal Authority to Adjust State Pension Plans" is available here.
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KPI President Dave Trabert added the following, ""The simple reality is that KPERS faces an unfunded liability well beyond $7.6 billion. KPERS acknowledges an additional $1.7 billion of losses that aren't yet reported and a more likely rate of return puts the true liability well closer to $14 billion. Many states are faced with the same problem, but Kansas is one of the worst. We can't solve this problem without having the full knowledge of the possible solutions and that means an understanding of the legal framework as well. Ralph does a terrific job of demonstrating that the U.S. Constitution allows state pension obligations to be changed for 'significant' purposes to remedy an 'economic problem.' If Kansas isn't facing a significant economic problem right now, then that definition is meaningless."
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Kansas Policy Institute is an independent think-tank that advocates for free market solutions and the protection of personal freedom for all Kansans. Our work centers on state and local economic policy with primary emphasis on education, fiscal policy and health care. We empower citizens, legislators and other government officials with objective research and creative ideas to promote a low-tax, pro-growth environment that preserves the ability of governments to provide high quality services. To speak with Kansas Policy Institute, please contact James Franko at (316) 634-0218.
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