Session of 2000
Substitute for HOUSE BILL No. 2718 By Kansas 2000 Select Committee 3-17

10 AN ACT concerning retirement; relating to defined contribution plan
11 for employees who become employed after the effective date of the
12 act.
13
14 Be it enacted by the Legislature of the State of Kansas:
15 Section 1. (a) Except as otherwise provided, the board of trustees of
16 the Kansas public employees retirement system shall provide and admin-
17 ister a defined contribution retirement plan for officers and employees
18 first employed on and after July 1, 2001, by an eligible employer of the
19 system. The retirement plan shall qualify as a defined contribution plan
20 under section 401(a) of the federal internal revenue code of 1986, as
21 amended. The retirement plan shall provide retirement and death ben-
22 efits for participants through the purchase of financial retirement prod-
23 ucts for their individual accounts, including fixed or variable annuities and
24 mutual funds, and shall be implemented upon the effective date of this
25 act. Participation in the retirement plan offered pursuant to this section
26 shall be in lieu of the Kansas public employees retirement system as in
27 effect prior to the effective date of this act.
28 (b) Each such officer or employee covered by the provisions of this
29 act shall elect to be a member of the Kansas public employees retirement
30 system or to participate in the retirement plan offered pursuant to this
31 section. The election must be filed within 60 days of commencing em-
32 ployment. Such election is irrevocable. If such election is not filed by the
33 member, such member shall be a member of the Kansas public employee
34 retirement system as in effect prior to the effective date of this act. Cov-
35 erage in the defined contribution retirement plan is effective immediately
36 upon the officer or employee making such an election to participate.
37 (c) Officers and employees covered by the provisions of this act shall
38 contribute an amount for each payroll period equal to 4% of such officer's
39 or employee's compensation. The state of Kansas and each other partic-
40 ipating employer shall contribute to each officer's or employee's account
41 for each payroll period the amount that would have been contributed to
42 the Kansas public employees retirement system on behalf of such officer
43 or employee as provided pursuant to K.S.A. 74-4920, and amendments

2
1 thereto, or any other applicable provision of law related to employer con-
2 tributions made pursuant to the Kansas public employees retirement sys-
3 tem and systems thereunder. Contributions to the plan shall be made
4 through payroll deductions on a pre-tax basis and shall not be subject to
5 taxation until distribution is actually made to or on behalf of the officer
6 or employee. If an officer or employee has the opportunity, through such
7 person's employer, to participate in a tax sheltered annuity plan author-
8 ized under section 403(b), a deferred compensation plan authorized un-
9 der section 457, or a cash or deferred arrangement available pursuant to
10 section 401(k) of the federal internal revenue code, as amended, such
11 person, through salary reduction or deduction, may make additional con-
12 tributions on a pre-tax basis to such other plan, subject to federal
13 limitations.
14 (d) Officers or employees covered by the provisions of this act shall
15 be granted a fully vested retirement benefit in such defined contribution
16 retirement plan after completing 10 years of service.
17 (e) Any officer or employee covered by the provisions of this act shall
18 be eligible for the death and disability benefit provided in K.S.A. 74-4916,
19 and amendments thereto, and the death benefit, optional death benefit
20 and long-term disability benefit as provided in K.S.A. 74-4927, and
21 amendments thereto. The cost of such officer's or employee's participa-
22 tion shall be paid by such officer's or employee's participating employer
23 as provided in K.S.A. 74-4927, and amendments thereto.
24 (f) The board shall administer the defined contribution retirement
25 plan offered pursuant to this section and shall establish rules and regu-
26 lations for the administration of the plan. The board shall select at least
27 four but not more than eight provider companies, at least one of which,
28 if otherwise qualified, shall be incorporated in Kansas, from which re-
29 tirement products for the defined contribution retirement plan shall be
30 purchased. In selecting the provider companies for the plan participants,
31 the board shall consider:
32 (1) The experience and demonstrated abilities of the provider com-
33 panies to provide the retirement products and related financial services
34 offered by them;
35 (2) the financial capabilities and ratings of the provider companies to
36 provide the rights and benefits under the retirement products offered by
37 them;
38 (3) the diversity of the products offered and the suitability of the
39 rights and benefits under the retirement products offered to the needs
40 and interests of participants;
41 (4) the number of states in which the provider companies provide
42 such products under primary public employee defined contribution pen-
43 sion plans; and

3
1 (5) the experience and demonstrated abilities of the provider com-
2 panies to provide participant education, continuing investment counseling
3 and retirement decision counseling, and enrollment, timely reports, re-
4 tirement options and other services to participants in the defined contri-
5 bution retirement plan.
6 (g) The board shall be responsible for ensuring that the providers
7 chosen by the board provide sufficient participant information and edu-
8 cation regarding investment and retirement counseling to each officer or
9 employee electing to participate in the defined contribution retirement
10 plan as provided by this act.
11 (h) Notwithstanding any provision of law to the contrary, the board
12 shall compile a list of names and addresses and maintain direct personal
13 contact and communication with each member of the Kansas public em-
14 ployees retirement system and each officer or employee who elects to
15 participate in the defined contribution retirement plan as provided by
16 this act.
17 (i) The joint committee on pensions, investments and benefits shall
18 periodically review the companies selected to offer retirement products
19 under the defined contribution retirement plan and the services provided
20 and results achieved by them to assure that the purposes of the plan are
21 being met.
22 (j) The provisions of this section shall not apply to members of the
23 Kansas public employees retirement system employed prior to July 1,
24 2001, and members of the Kansas police and firemen's retirement system
25 and the retirement system for judges.
26 (k) The provision of this section shall be part of and supplemental to
27 the provisions of K.S.A. 74-4901 et seq., and amendments thereto.
28 Sec. 2. This act shall take effect and be in force from and after July
29 1, 2001, and its publication in the statute book.