SESSION OF
2002
SUPPLEMENTAL NOTE
ON HOUSE BILL NO. 2626
As Recommended by House Committee on
HB 2626 would allow for trustee-to-trustee transfers for qualified service credit purchases using money invested in one retirement plan to buy service credit in a different plan. Specifically, the bill would allow trustee-to-trustee transfers in order to avoid tax consequences for persons with 403(b) retirement annuity accounts or 457 retirement savings accounts who are eligible and wish to buy KPERS service credit.
Background
The KPERS
Executive Director indicated that state legislation is required to
address recent changes in federal law. The Economic Growth and Tax
Relief Reconciliation Act (EGTRRA) of 2001 was cited as an attempt
to address deficiencies in the qualified retirement plan market.
Changes included in the federal law that were identified were
increased contribution limits; increased portability among plans;
enhanced service purchase alternatives; tax credits; and enhanced
contributions to IRAs. KPERS requested the Chairperson of the Joint
Committee on Pensions, Investments and Benefits to prefile this
bill since the Joint Committee had completed its 2001 Interim work
and subsequently KPERS learned that state legislation would be
required. The Joint Committee had been apprised that state
legislation might be needed, but none had been drafted prior to
that panel’s last interim
meeting.
There is no fiscal impact on administrative costs reported by KPERS for this legislation. A slight increase in workload is anticipated, and the 2001 Legislature authorized 4.0 additional positions to work in KPERS customer service which would handle this work.
*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 athttp://www.accesskansas.org/legislature