Session of 1998
                   
HOUSE BILL No. 2935
         
By Representatives Nichols, Crow, Dillon, Findley, Flaharty, Flora, Gar-
                ner, Grant, Henderson, Johnston, Kirk, Klein, Kuether, McKinney, E.
                Peterson, Phelps, Sawyer, Sharp, Showalter, Shriver, Spangler, Storm,
                Toelkes and Wells
               
2-13
         
12             AN ACT concerning the Kansas public employees retirement system and
13             systems thereunder; relating to employer contribution rates; amending
14             K.S.A. 20-2605 and K.S.A. 1997 Supp. 74-4920 and 74-4967 and re-
15             pealing the existing sections.
16            
17       Be it enacted by the Legislature of the State of Kansas:
18           Section 1. K.S.A. 20-2605 is hereby amended to read as follows:
19       20-2605. (a) The board shall select and employ or retain a qualified ac-
20       tuary who shall serve at its pleasure as its technical advisor on matters
21       regarding operation of the retirement system for judges. The actuary
22       shall:
23           (1) As soon after the effective date as practicable and once every three
24       years thereafter, make a general investigation of the actuarial experience
25       under the retirement system for judges including mortality, retirement,
26       employment turnover and interest, and recommend actuarial tables for
27       use in valuations and in calculating actuarial equivalent values based on
28       such investigation; make a valuation of the liabilities and reserves of the
29       retirement system for judges, and a determination of the contributions
30       required by the retirement system for judges to discharge its liabilities
31       and recommend to the board rates of employer contributions required
32       to establish and maintain the retirement system for judges on an actuarial
33       reserve basis.
34           (2) Perform such other duties as may be assigned by the board.
35           (b) Upon the basis of the actuarial valuation and appraisal and upon
36       the recommendation of the actuary, the board shall certify, on or before
37       July 15 of each year, to the division of budget an actuarially determined
38       estimate of the rate of contribution which will be required, together with
39       all judges' contributions and other assets of the retirement system for
40       judges to pay all liabilities which shall exist or accrue under the retirement
41       system for judges, including amortization of the unfunded accrued lia-
42       bility over a period of 40 years commencing on July 1, 1993. The rate of
43       contribution for the state determined under this section shall not include

HB 2935

2

  1       the costs of administration of the system. The rate of contribution for the
  2       state determined under this section shall in no event be less than the
  3       judge's member contribution rate as provided in K.S.A. 20-2603 and
  4       amendments thereto.
  5           (c) The division of the budget and the governor shall include in the
  6       budget and in the budget request for appropriations for personal services
  7       the sum required to satisfy the state's obligation under the retirement
  8       system for judges as certified by the board and shall present the same to
  9       the legislature for allowance and appropriation.
10           Sec. 2. K.S.A. 1997 Supp. 74-4920 is hereby amended to read as
11       follows: 74-4920. (1) Upon the basis of each annual actuarial valuation
12       and appraisal as provided for in subsection (3)(a) of K.S.A. 74-4908 and
13       amendments thereto, the board shall certify, on or before July 15 of each
14       year, to the division of the budget in the case of the state and to the agent
15       for each other participating employer an actuarially determined estimate
16       of the rate of contribution which will be required, together with all ac-
17       cumulated contributions and other assets of the system, to be paid by
18       each such participating employer to pay all liabilities which shall exist or
19       accrue under the system, including amortization of the actuarial accrued
20       liability over a period of 40 years commencing on July 1, 1993, and the
21       actuarial accrued liability for members of the faculty and other persons
22       who are employed by the state board of regents or by educational insti-
23       tutions under its management assisted by the state board of regents in
24       the purchase of retirement annuities as provided in K.S.A. 74-4925 and
25       amendments thereto, as provided in this section. The actuarial accrued
26       liability for all participating employers other than the state board of re-
27       gents relating to members of the faculty and other persons described in
28       this section, shall be amortized by annual payments that increase 4% for
29       each year remaining in the amortization period. For all participating em-
30       ployers other than the state board of regents relating to members of the
31       faculty and other persons described in this section, the projected unit
32       credit actuarial cost method shall be used in annual actuarial valuations,
33       commencing with the 1993 valuation, to determine the employer contri-
34       bution rates that shall be certified by the board. The actuarial accrued
35       liability for members of the faculty and other persons described in this
36       subsection assisted by the state board of regents in the purchase of re-
37       tirement annuities as provided in K.S.A. 74-4925 and amendments
38       thereto shall be amortized by annual level payments over a period of 10
39       years commencing July 1, 1993. Such certified rate of contribution shall
40       be based on the standards set forth in subsection (3)(a) of K.S.A. 74-4908
41       and amendments thereto and shall not be based on any other purpose
42       outside of the needs of the system.
43           (2) The division of the budget and the governor shall include in the

HB 2935

3

  1       budget and in the budget request for appropriations for personal services
  2       the sum required to satisfy the state's obligation under this act as certified
  3       by the board and shall present the same to the legislature for allowance
  4       and appropriation.
  5           (3) Each other participating employer shall appropriate and pay to
  6       the system a sum sufficient to satisfy the obligation under this act as
  7       certified by the board.
  8           (4) Each participating employer is hereby authorized to pay the em-
  9       ployer's contribution from the same fund that the compensation for which
10       such contribution is made is paid from or from any other funds available
11       to it for such purpose. Each political subdivision, other than an instru-
12       mentality of the state, which is by law authorized to levy taxes for other
13       purposes, may levy annually at the time of its levy of taxes, a tax which
14       may be in addition to all other taxes authorized by law for the purpose of
15       making its contributions under this act and, in the case of cities and coun-
16       ties, to pay a portion of the principal and interest on bonds issued under
17       the authority of K.S.A. 12-1774 and amendments thereto by cities located
18       in the county, which tax, together with any other fund available, shall be
19       sufficient to enable it to make such contribution. In lieu of levying the
20       tax authorized in this subsection, any taxing subdivision may pay such
21       costs from any employee benefits contribution fund established pursuant
22       to K.S.A. 12-16,102 and amendments thereto. Each participating em-
23       ployer which is not by law authorized to levy taxes as described above,
24       but which prepares a budget for its expenses for the ensuing year and
25       presents the same to a governing body which is authorized by law to levy
26       taxes as described above, may include in its budget an amount sufficient
27       to make its contributions under this act which may be in addition to all
28       other taxes authorized by law. Such governing body to which the budget
29       is submitted for approval, may levy a tax sufficient to allow the partici-
30       pating employer to make its contributions under this act, which tax, to-
31       gether with any other fund available, shall be sufficient to enable the
32       participating employer to make the contributions required by this act.
33           (5) The rate of contribution certified to a participating employer as
34       provided in this section shall apply during the fiscal year of the partici-
35       pating employer which begins in the second calendar year following the
36       year of the actuarial valuation. For the fiscal year commencing in calendar
37       year 1993, the employer rate of contribution for the state of Kansas and
38       for participating employers under K.S.A. 74-4931 and amendments
39       thereto shall be 3.1% of the amount of compensation upon which mem-
40       bers contribute during the period. For the fiscal year commencing in
41       calendar year 1994, the employer rate of contribution for the state of
42       Kansas and for participating employers under K.S.A. 74-4931 and amend-
43       ments thereto shall be 3.2% of the amount of compensation upon which

HB 2935

4

  1       members contribute during the period. For the fiscal year commencing
  2       in calendar year 1994, the employer rate of contribution for participating
  3       employers other than the state of Kansas shall be 2.2% of the amount of
  4       compensation upon which members contribute during the period. Except
  5       as specifically provided in this section, for the fiscal year commencing in
  6       calendar year 1995, the rate of contribution certified to a participating
  7       employer shall in no event exceed such participating employer's contri-
  8       bution rate for the immediately preceding fiscal year by more than 0.1%
  9       of the amount of compensation upon which members contribute during
10       the period. Except as specifically provided in this section, for fiscal years
11       commencing in calendar year 1996 and in each subsequent calendar year,
12       the rate of contribution certified to the state of Kansas shall in no event
13       exceed the state's contribution rate for the immediately preceding fiscal
14       year by more than 0.2% of the amount of compensation upon which
15       members contribute during the period. For the fiscal year commencing
16       in calendar year 1998, the employer rate of contribution for the state of
17       Kansas and for participating employers under K.S.A. 74-4931 and amend-
18       ments thereto and for the fiscal year commencing in calendar year 1999,
19       the employer rate of contribution for participating employers other than
20       the state of Kansas shall be 4.0% of the amount of compensation upon
21       which members contribute during such period. Except as specifically pro-
22       vided in this section, for fiscal years commencing in calendar year 1997
23       and in each subsequent calendar year, the rate of contribution certified
24       to participating employers other than the state of Kansas shall in no event
25       exceed such participating employer's contribution rate for the immedi-
26       ately preceding fiscal year by more than 0.15% of the amount of com-
27       pensation upon which members contribute during the period. There shall
28       be an employer rate of contribution certified to the state of Kansas and
29       participating employers under K.S.A. 74-4931 and amendments thereto.
30       There shall be a separate employer rate of contribution certified to all
31       other participating employers other than the state of Kansas. The rate of
32       contribution for employers determined under this section shall in no event
33       be less than the employee contribution rate as provided in K.S.A. 74-4919
34       and amendments thereto.
35           (6) The actuarial cost of any legislation enacted in the 1994 session
36       of the Kansas legislature will be included in the June 30, 1994, actuarial
37       valuation in determining contribution rates for participating employers.
38           (7) The board with the advice of the actuary may fix the contribution
39       rates for participating employers joining the system after one year from
40       the first entry date or for employers who exercise the option contained
41       in K.S.A. 74-4912 and amendments thereto at rates different from the
42       rate fixed for employers joining within one year of the first entry date.
43           (8) Employer contributions shall in no way be limited by any other

HB 2935

5

  1       act which now or in the future establishes or limits the compensation of
  2       any member.
  3           (9) Each participating employer shall remit quarterly, or as the board
  4       may otherwise provide, all employee deductions and required employer
  5       contributions to the executive secretary for credit to the Kansas public
  6       employees retirement fund within 20 days after the end of the period
  7       covered by the remittance or within 25 days after forms or written in-
  8       structions from the system were mailed by the system to such employer,
  9       whichever is later. Remittances of such deductions and contributions re-
10       ceived after such date are delinquent. Delinquent payments due under
11       this subsection shall be subject to interest at the rate established for in-
12       terest on judgments under subsection (a) of K.S.A. 16-204 and amend-
13       ments thereto. At the request of the board, delinquent payments which
14       are due or interest owed on such payments, or both, may be deducted
15       from any other moneys payable to such employer by any department or
16       agency of the state.
17           Sec. 3. K.S.A. 1997 Supp. 74-4967 is hereby amended to read as
18       follows: 74-4967. (1) Upon the basis of an annual actuarial valuation and
19       appraisal of the system conducted in the manner provided for in K.S.A.
20       74-4908 and amendments thereto, the board shall certify, on or before
21       July 15 of each year to each participating employer an actuarially deter-
22       mined estimate of the rate of contribution which shall be required to be
23       paid by each such participating employer to pay all of the liabilities which
24       shall accrue under the system from and after the entry date as determined
25       by the board, upon recommendation of the actuary. Such rate shall be
26       uniform for all participating employers, and shall be comprised of a rate
27       for benefits accruing after June 30, 1993, and a rate for amortization of
28       the additional liability for benefits provided by this act which is attribut-
29       able to service rendered before July 1, 1993. Such additional liability shall
30       be amortized over a period of 40 years commencing on July 1, 1993, by
31       annual payments that increase 4% for each year remaining in the amor-
32       tization period. The employer's rate of contribution determined under
33       this section shall not include the costs of administration of the system.
34       The rate of contribution for employers determined under this section shall
35       in no event be less than the member contribution rate as provided in
36       K.S.A. 74-4965 and amendments thereto.
37           (2) The board shall determine for each employer separately an
38       amount sufficient to amortize over a period of not to exceed 40 years all
39       liabilities for past service costs which shall have accrued at the time of
40       entry into the system. On the basis of such determination the board shall
41       annually certify to each participating employer separately an actuarially
42       determined estimate of the rate of contribution which shall be required
43       to be paid by that participating employer to pay all of the liabilities for

HB 2935

6

  1       such past service costs. Such rate shall be termed the employer's prior
  2       service contribution. The board may enter into agreements with any par-
  3       ticipating employer which has employees or retirants under the special
  4       pension systems established under K.S.A. 13-14a01 to 13-14a14, inclu-
  5       sive, and amendments thereto or K.S.A. 14-10a01 to 14-10a15, inclusive,
  6       and amendments thereto, for the purpose of scheduling the payment of
  7       such past service costs in an orderly manner which will tend to stabilize
  8       the annual total financial burden on such employers in meeting their
  9       present and future obligations under this system and such special systems,
10       but in no event shall the annual prior service contribution be less than
11       the interest cost on the total of such past service liability.
12           (3) Each participating employer shall appropriate and pay to the sys-
13       tem a sum sufficient to satisfy the obligations under this act as certified
14       by the board.
15           (4) Each participating employer is hereby authorized to pay the em-
16       ployer's contribution from the same fund that the compensation for which
17       such contribution is made is paid from or from any other funds available
18       to it for such purpose. Each employer may levy annually at the time of
19       its levy of taxes, a tax which may be in addition to all other taxes authorized
20       by law for the purpose of making its contributions under this act, and, in
21       the case of cities and counties, to pay a portion of the principal and in-
22       terest on bonds issued by cities under the authority of K.S.A. 12-1774,
23       and amendments thereto, for the financing of redevelopment projects
24       upon property located in such county which tax, together with any other
25       fund available, shall be sufficient to enable it to make such contribution.
26       In lieu of levying the tax authorized in this subsection, any taxing subdi-
27       vision may pay such costs from any employee benefits contribution fund
28       established pursuant to K.S.A. 12-16,102 and amendments thereto.
29           (5) Employer contributions shall in no way be limited by any other
30       act which now or in the future establishes or limits the compensation of
31       any member.
32           (6) The rate of contribution certified to each participating employer
33       as provided in this section shall apply during the fiscal year of such par-
34       ticipating employer which begins in the second calendar year following
35       the year of the actuarial valuation, but the rate of contribution during the
36       first year following the employer's entry date shall be equal to 16% of the
37       amount of compensation on which members contribute during the year.
38           (7) Each participating employer shall remit quarterly, or as the board
39       may otherwise provide, all employee deductions and required employer
40       contributions to the executive secretary for credit to the Kansas public
41       employees retirement fund within 20 days after the end of the period
42       covered by the remittance or within 25 days after forms or written in-
43       structions from the system were mailed by the system to such employer,

HB 2935

7

  1       whichever is later. Remittances of such deductions and contributions re-
  2       ceived after such date are delinquent. Delinquent payments due under
  3       this subsection (7) shall be subject to interest at the rate established for
  4       interest on judgments under subsection (a) of K.S.A. 16-204 and amend-
  5       ments thereto. At the request of the board, delinquent payments which
  6       are due or interest owed on such payments, or both, may be deducted
  7       from any other moneys payable to such employer by any department or
  8       agency of the state.
  9           Sec. 4. K.S.A. 20-2605 and K.S.A. 1997 Supp. 74-4920 and 74-4967
10       are hereby repealed.
11           Sec. 5. This act shall take effect and be in force from and after its
12       publication in the statute book.
13      
14