Session of 1998
                   
HOUSE BILL No. 2962
         
By Joint Committee on Pensions, Investments and Benefits
         
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            9             AN ACT concerning the Kansas public employees retirement system and
10             systems thereunder; relating to additional retirant payment; creating a
11             shared earnings reserve; amending K.S.A. 1997 Supp. 74-4922 and
12             repealing the existing section.
13            
14       Be it enacted by the Legislature of the State of Kansas:
15           New Section 1. (a) Each retirant shall be entitled to receive an ad-
16       ditional retirant payment as specified in this section. Such additional re-
17       tirant payment shall be paid in addition to the amount of the retirement
18       benefit, pension or annuity payment to which the retirant is otherwise
19       entitled, and shall be paid in the form of an additional one-time warrant
20       which shall be issued on October l of any year of payment on and after
21       the effective date of this act.
22           (b) Each such additional retirant payment shall be payable to the
23       retirant in an amount equal to the amount determined by: (1) Multiplying
24       the amount equal to 20% of the total amount credited to the shared
25       earnings reserve under subsection (f) of K.S.A. 74-4922 and amendments
26       thereto by the monthly payment amount of the annual retirement benefit,
27       pension or annuity payment to such retirant at the rate in effect on July
28       1 of the year of payment; and (2) dividing the product obtained by the
29       total amount of all monthly benefits, pensions or annuities payable to all
30       retirants at the rate in effect on July 1 of the year of payment. The amount
31       so determined for each retirant shall be the additional retirant payment
32       for such retirant. In no event shall the payment to a retirant be more than
33       8.33% of such retirant's annual benefit.
34           (c) The additional retirant payment as provided in this section shall
35       be payable in an amount equal to 20% of the total amount credited to
36       the shared earnings reserve as provided in K.S.A. 74-4921 and amend-
37       ments thereto in any year.
38           (d) As used in this section: (1) ``Retirant'' means (A) any person who
39       is a member of a retirement system and who retired prior to July 1 of the
40       year preceding the year of payment, (B) any person who is a special
41       member of a retirement system and who retired prior to July 1 of the
42       year preceding the year of payment, (C) any person who is a joint an-
43       nuitant or beneficiary of any member described in clause (A) or any spe-

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  1       cial member described in clause (B), and (D) any insured disability ben-
  2       efit recipient.
  3           (2) ``Retirement system'' mean the Kansas public employees retire-
  4       ment system, the Kansas police and firemen's retirement system, the state
  5       school retirement system and the retirement system for judges.
  6           (3) ``Insured disability benefit recipient'' means any person receiving
  7       an insured disability benefit under K.S.A. 74-4927, and amendments
  8       thereto, prior to July 1 of the year preceding the year of payment.
  9           Sec. 2. K.S.A. 1997 Supp. 74-4922 is hereby amended to read as
10       follows: 74-4922. The executive secretary shall maintain such records as
11       are necessary to determine the following reserves of the fund.
12           (a) Member's accumulated contribution reserve. This reserve shall be
13       maintained for each member and for each member having a vested ben-
14       efit. Each such reserve account shall be credited with the employee's
15       contributions upon receipt thereof and shall be credited on June 30 each
16       year with interest: (1) At the actuarial assumption rate adopted by the
17       board on the balance in the employee's account as of the preceding De-
18       cember 31 for those who first became members prior to July 1, 1993; and
19       (2) 4% for those who first became members on and after July 1, 1993.
20       For the purposes of crediting interest upon accumulated contributions,
21       the term member shall include the beneficiary of a member during the
22       twelve-month period following the death of a member and the beneficiary
23       of a member pursuant to subsection (6) of K.S.A. 74-4918 and amend-
24       ments thereto during any period commencing on the date of death of
25       such member and ending on the date that the member would have at-
26       tained retirement age. Refunds of employee's accumulated contributions
27       prior to retirement shall be made from this reserve. Upon commence-
28       ment of payments of the retirement benefit, the amount in this reserve
29       account for the retiring member or members, shall be transferred to the
30       retirement benefit payment reserve.
31           (b) Retirement benefit accumulation reserve. This reserve shall be
32       credited with the portion of employer contributions for retirement ben-
33       efits (both for prior service and for participating service) and with income
34       of the fund not otherwise directed by law to a different reserve. The board
35       shall credit interest to all other reserves and reserve accounts as provided
36       by law at rates determined by the board. Interest so credited shall be
37       transferred from the retirement benefit accumulation reserve. Separate
38       reserve accounts shall not be maintained for each participating employer
39       joining the system on the first entry date. The board shall determine
40       whether or not separate reserve accounts shall be maintained for each
41       participating employer joining the system after the first entry date.
42           (c) Retirement benefit payment reserve. (i) This reserve will be cred-
43       ited with the amount transferred from the member's accumulated con-

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  1       tributions reserve and from the retirement benefit accumulation reserve
  2       and with interest allocated to this reserve at the rate determined each
  3       year by the board. This reserve shall be charged with payments of retire-
  4       ment benefits including payments upon death of the excess of member's
  5       accumulated contributions over retirement benefit payments paid to date
  6       of death. Annually, upon receipt of the actuarial valuation as of the end
  7       of the previous fiscal year the board shall cause certain adjustments to be
  8       made which shall be made prior to the end of the fiscal year immediately
  9       following the fiscal year for which the actuarial valuation is applicable.
10           (ii) The amount of these adjustments shall be the difference between
11       the amount required by the current actuarial valuation and the amount
12       required by the previous year's actuarial valuation plus amounts trans-
13       ferred to this reserve less amounts paid out of this reserve during the
14       fiscal year to be adjusted. Such adjustments required to maintain this
15       reserve on an actuarial reserve basis as of June 30 of the previous fiscal
16       year shall be accomplished by transfers to or from, as applicable, the
17       retirement benefit accumulation reserve.
18           (d) Expense reserve. This reserve shall be credited with interest al-
19       located to this reserve at the rate determined each year by the board. It
20       shall be charged with payments of all expenses incurred in connection
21       with the administration of the system.
22           (e) Group insurance reserve. This reserve shall be credited with the
23       employer contributions required to pay the cost for the plan of death and
24       long-term disability benefits under K.S.A. 74-4927, and amendments
25       thereto, with any dividend or retrospective rate credit allowed by any
26       insurance company or companies contracted with by the board for such
27       plan, and with interest allocated to this reserve at the rate determined
28       each year by the board. This reserve shall be charged with the amount of
29       the payments required to provide such plan of death and long-term dis-
30       ability benefits.
31           (f) Shared earnings reserve. Each year prior to October, if the retire-
32       ment system's time-weighted rate of return rounded to one decimal point
33       is equal to or exceeds 12% as of the immediately preceding June 30, this
34       reserve shall be credited with an amount equal to 25% of any such rate
35       of return that is in excess of 12% but in no event shall such amount to be
36       credited to this reserve exceed 2% of the market value of the fund on the
37       immediately preceding June 30. This reserve shall be charged with pay-
38       ments of any additional retirant payments as provided in section 1 and
39       amendments thereto. No interest shall be credited to this reserve.
40           Sec. 3. K.S.A. 1997 Supp. 74-4922 is hereby repealed.
41           Sec. 4. This act shall take effect and be in force from and after its
42       publication in the statute book.
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