Brief ⁽¹⁾

The substitute bill would make revisions in statutory provisions pertaining to judges' salaries and employer contributions for certain public employees. The provisions would halt for an additional six months the death and disability contributions for public employers and would implement a modified salary adjustment for judges in FY 2002.

First, the bill's provisions would extend for two quarters in FY 2002 the present moratorium on the employer contributions for insurance payments that finance the death and long-term disability benefits program administered by the Kansas Public Employees Retirement System (KPERS). Public employers affected would be contributors to the Judges Retirement System, the state/school and local KPERS plans, and Regents' retirement annuity plans.

Second, the bill would reduce in FY 2002 a proposed salary plan increase for judges from 3.0 percent to 2.0 percent, with an adjustment to be implemented at 1.0 percent in the first half of the fiscal year and at an additional 1.0 percent in the second half.

Background

Both changes were recommended by the House Appropriations Committee to implement statutory changes associated with its recommendations in the House version of the 2001 Omnibus appropriations bill (Sub. for HB 2504).

The House Committee of the Whole amendment corrected an error in the length of the moratorium. A printer's error changed the corrected date from April 1, 2000, to April 1, 2001.

Death and Disability Payments. The 2000 Legislature approved a five-quarter moratorium covering the last quarter of FY 2000 and four quarters of FY 2001 for insurance payments that finance the death and long-term disability benefits program. Extending the moratorium for another two quarters in FY 2002 would yield estimated savings of $13.8 million in state and local governmental employer contributions.

KPERS projections indicate that if an additional six months moratorium is enacted, then the funded ratio for the KPERS death and long-term disability benefits program would be between 81 percent and 86 percent at the end of FY 2002. The funded ratio at the end of FY 2001 (the conclusion of the present five-quarter moratorium) for the program would be between 94 and 97 percent, according to projections from KPERS. The funded ratio prior to the employer contribution moratorium had been greater than 100 percent, and at the end of FY 1999 had been 115 percent.

Judges' Salary Adjustment. The change relating to judges' salaries was recommended by the House Budget Committee that considered the budget of the Judicial Branch. One of its recommendations was that part of a reduction in FY 2002 financing be taken from judges' salaries. Because judges' salaries are tied to salary increases for classified employees, it is necessary to amend the statute to allow judges to receive a lesser salary increase than classified employees. Current law links judges' salary adjustments to changes in classified salaries. The amount of the reduction resulting from giving judges a phased-in 2.0 percent increase instead of a 3.0 percent increase is estimated to be $246,000.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi