Kansas pension woes threaten thousands of public employees in Johnson County

retireThe Kansas Public Employees Retirement System is in a world of financial hurt.

These problems deserve plenty of attention far outside Topeka — especially in Johnson County.

While many people label KPERS as the “state’s” pension plan, it also provides retirement benefits for tens of thousands of school, city and county employees across Kansas. And Johnson County has plenty of those workers.

KPERS officials recently reduced the system’s expected annual investment returns, which hiked its total funding shortfall by $560 million. And the financially ailing state this year delayed making a nearly $100 million payment into the system.

While officials are telling people there’s nothing to worry about for now, the fiscal ills in the Sunflower State caused by Gov. Sam Brownback’s ruinous income tax cuts are making it more difficult to fully fund the system. That also could mean KPERS again will boost employees’ contributions rates, reducing their take-home pay.

UPDATED 4 p.m.: Johnson County Manager Hannes Zacharias made an excellent point Wednesday.

“We’re watching the KPERS funding discussions closely and are very concerned about it,” he said in a statement. “The majority of our county employees and retirees are counting on the KPERS system for retirement. Any further erosion of KPERS may negatively impact our ability to attract and retain talent.”

This week I contacted spokespeople in Johnson County government and the county’s two largest cities, Overland Park and Olathe. All have members in KPERS as well as the separate Kansas Police and Fire Retirement System that serves law enforcement employees.

— Johnson County  has 2,502 employees in the KPERS plan and 587 employees under the Kansas Police and Fire system.

— Overland Park has 483 workers in KPERS and 133 in the Kansas Police and Fire system.

— Olathe has about 580 KPERS members and 280 in the Kansas Police and Fire system.

Local taxpayers through their governments contribute money into KPERS, as do workers. For instance, Johnson County government paid more than $22.5 million into KPERS in the last year; employees put in about $11 million.

The woes of KPERS have caught the attention of local officials.

Overland Park’s 2017 state legislative program called on Kansas lawmakers to “fully fund its portion of the employer contributions.”

City officials also made an observation along the lines of the one made by Zacharias: “Any new policy changes could have a negative impact on local government employee recruitment and retention, particularly in the competitive Johnson County area.”

And the city said it “opposes the use of any more pension fund bonds to close the unfunded liability gap.”

That’s a reference to the state’s controversial issuance of $1 billion in bonds for KPERS in 2015. Promoters said it would make money for KPERS as long as returns were more than the 4.7 percent interest on the bonds. But that’s a long-term gamble.

Gambling, of course, is not a term that’s supposed to be connected to public employee pension systems. They are expected to be rock-solid retirement plans for thousands of Kansans — including Johnson Countians.