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Minutes for HB2720 - Committee on Federal and State Affairs
Short Title
Providing increased maximum retirement benefit for KP&F members.
Minutes Content for Mon, Mar 5, 2018
Chairperson Barker opened the hearing on HB2720. Jason Long, Revisor, provided an overview of the bill (Attachment 7). Questions were asked by Chairperson Barker and Representative Whitmer.
Representative Eber Phelps was recognized as a proponent of HB2720 (Attachment 8). This bill calls for the removal of the 90 percent cap on pensions earned under the present KP&F system. They are losing highly trained and skilled police and firefighters to retirement or other careers since they can no longer obtain additional benefits. HB2720 would allow these men and women to continue serving their communities.
Robert Wing testified as a proponent of HB2720 (Attachment) 9. Under the current statute, the retirement benefit cannot exceed 90 percent of a member's final average salary, which means that police and firefighters with more than 36 years of service accrue no additional benefit. This leads to early retirement of some of their most skilled and senior employees. The firefighters feel the cap is unfair because the other state retirement system, KPERS, has no benefit cap. Representative Whitmer had a question for Mr. Wing.
Chairperson Barker recognized Alan Conroy of KPERS, who provided informational testimony on HB2720 (Attachment) 10. This bill changes the benefit plan design for KP&F members by increasing benefits for certain members. This will cause higher costs to fully fund those benefits. HB2720 does not specify how the change in benefit plan design will be funded. Questions were asked by Representatives Carpenter, Highberger, Rooker, Whitmer, Highland, and Horn, as well as Chairperson Barker. It is possible that increasing the maximum benefit to 100% of final average salary could motivate certain members to retire later; however, the number that could potentially be impacted is very small. Chairperson Barker stated that he recently received information from the Financial Institutions Chairperson, who was also on the KPERS Committee with him, that in 2013 when the benefits were increased from 80 percent to 90 percent, there was an agreement that there would be no more requests to raise the benefits. Mr. Conroy stated he was not aware of that agreement.
Chairperson Barker asked if there were any further proponents, opponents or neutrals. Seeing none, the hearing on HB2720 was closed.
