Session of 1999
         
SENATE BILL No. 358
         
By Committee on Ways and Means
         
3-30
         
  9             AN  ACT concerning the Kansas public employees retirement system and
10             systems thereunder; relating to cost-of-living adjustments; employer
11             contribution rates; amending K.S.A. 20-2605 and K.S.A. 1998 Supp.
12             74-4920 and 74-4967 and repealing the existing sections.
13      
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. K.S.A. 20-2605 is hereby amended to read as follows: 20-
16       2605. (a) The board shall select and employ or retain a qualified actuary
17       who shall serve at its pleasure as its technical advisor on matters regarding
18       operation of the retirement system for judges. The actuary shall:
19             (1) As soon after the effective date as practicable and once every three
20       years thereafter, make a general investigation of the actuarial experience
21       under the retirement system for judges including mortality, retirement,
22       employment turnover and interest, and recommend actuarial tables for
23       use in valuations and in calculating actuarial equivalent values based on
24       such investigation; make a valuation of the liabilities and reserves of the
25       retirement system for judges, and a determination of the contributions
26       required by the retirement system for judges to discharge its liabilities
27       and recommend to the board rates of employer contributions required
28       to establish and maintain the retirement system for judges on an actuarial
29       reserve basis.
30             (2) Perform such other duties as may be assigned by the board.
31             (b) Upon the basis of the actuarial valuation and appraisal and upon
32       the recommendation of the actuary, the board shall certify, on or before
33       July 15 of each year, to the division of budget an actuarially determined
34       estimate of the rate of contribution which will be required, together with
35       all judges' contributions and other assets of the retirement system for
36       judges to pay all liabilities which shall exist or accrue under the retirement
37       system for judges, including amortization of the unfunded accrued lia-
38       bility over a period of 40 years commencing on July 1, 1993. The rate of
39       contribution for the state determined under this section shall not include
40       the costs of administration of the system.
41             (c) The division of the budget and the governor shall include in the
42       budget and in the budget request for appropriations for personal services
43       the sum required to satisfy the state's obligation under the retirement

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  1       system for judges as certified by the board and shall present the same to
  2       the legislature for allowance and appropriation.
  3             (d) Except as otherwise provided by law, the actuarial cost of any
  4       cost-of-living adjustment or postretirement benefit adjustment enacted by
  5       the Kansas legislature shall be reflected in the employer contribution rate
  6       in the fiscal year immediately following such enactment.
  7             Sec.  2. K.S.A. 1998 Supp. 74-4920 is hereby amended to read as
  8       follows: 74-4920. (1) (a) Upon the basis of each annual actuarial valuation
  9       and appraisal as provided for in subsection (3)(a) of K.S.A. 74-4908 and
10       amendments thereto, the board shall certify, on or before July 15 of each
11       year, to the division of the budget in the case of the state and to the agent
12       for each other participating employer an actuarially determined estimate
13       of the rate of contribution which will be required, together with all ac-
14       cumulated contributions and other assets of the system, to be paid by
15       each such participating employer to pay all liabilities which shall exist or
16       accrue under the system, including amortization of the actuarial accrued
17       liability over a period of 40 years commencing on July 1, 1993, and the
18       actuarial accrued liability for members of the faculty and other persons
19       who are employed by the state board of regents or by educational insti-
20       tutions under its management assisted by the state board of regents in
21       the purchase of retirement annuities as provided in K.S.A. 74-4925 and
22       amendments thereto, as provided in this section. The actuarial accrued
23       liability for all participating employers other than the state board of re-
24       gents relating to members of the faculty and other persons described in
25       this section, shall be amortized by annual payments that increase 4% for
26       each year remaining in the amortization period. For all participating em-
27       ployers other than the state board of regents relating to members of the
28       faculty and other persons described in this section, the projected unit
29       credit actuarial cost method shall be used in annual actuarial valuations,
30       commencing with the 1993 valuation, to determine the employer contri-
31       bution rates that shall be certified by the board. The actuarial accrued
32       liability for members of the faculty and other persons described in this
33       subsection assisted by the state board of regents in the purchase of re-
34       tirement annuities as provided in K.S.A. 74-4925 and amendments
35       thereto shall be amortized by annual level payments over a period of 11
36       years commencing July 1, 1993. Such certified rate of contribution shall
37       be based on the standards set forth in subsection (3)(a) of K.S.A. 74-4908
38       and amendments thereto and shall not be based on any other purpose
39       outside of the needs of the system.
40             (b)  (i) For employers affiliating on and after January 1, 1999, upon
41       the basis of an annual actuarial valuation and appraisal of the system
42       conducted in the manner provided for in K.S.A. 74-4908 and amend-
43       ments thereto, the board shall certify, on or before July 15 of each year

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  1       to each such employer an actuarially determined estimate of the rate of
  2       contribution which shall be required to be paid by each such employer
  3       to pay all of the liabilities which shall accrue under the system from and
  4       after the entry date as determined by the board, upon recommendation
  5       of the actuary. Such rate shall be termed the employer's participating
  6       service contribution and shall be uniform for all participating employers.
  7       Such additional liability shall be amortized over a period of 34 years com-
  8       mencing on July 1, 1999, by annual payments that increase 4% for each
  9       year remaining in the amortization period. For all participating employers
10       described in this section, the projected unit credit actuarial cost method
11       shall be used in annual actuarial valuations to determine the employer
12       contribution rates that shall be certified by the board.
13             (ii) The board shall determine for each such employer separately an
14       amount sufficient to amortize over a period of not to exceed 34 years
15       commencing July 1, l999, all liabilities for prior service costs which shall
16       have accrued at the time of entry into the system. On the basis of such
17       determination the board shall annually certify to each such employer sep-
18       arately an actuarially determined estimate of the rate of contribution
19       which shall be required to be paid by that employer to pay all of the
20       liabilities for such prior service costs. Such rate shall be termed the em-
21       ployer's prior service contribution.
22             (2) The division of the budget and the governor shall include in the
23       budget and in the budget request for appropriations for personal services
24       the sum required to satisfy the state's obligation under this act as certified
25       by the board and shall present the same to the legislature for allowance
26       and appropriation.
27             (3) Each other participating employer shall appropriate and pay to
28       the system a sum sufficient to satisfy the obligation under this act as
29       certified by the board.
30             (4) Each participating employer is hereby authorized to pay the em-
31       ployer's contribution from the same fund that the compensation for which
32       such contribution is made is paid from or from any other funds available
33       to it for such purpose. Each political subdivision, other than an instru-
34       mentality of the state, which is by law authorized to levy taxes for other
35       purposes, may levy annually at the time of its levy of taxes, a tax which
36       may be in addition to all other taxes authorized by law for the purpose of
37       making its contributions under this act and, in the case of cities and coun-
38       ties, to pay a portion of the principal and interest on bonds issued under
39       the authority of K.S.A. 12-1774 and amendments thereto by cities located
40       in the county, which tax, together with any other fund available, shall be
41       sufficient to enable it to make such contribution. In lieu of levying the
42       tax authorized in this subsection, any taxing subdivision may pay such
43       costs from any employee benefits contribution fund established pursuant

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  1       to K.S.A. 12-16,102 and amendments thereto. Each participating em-
  2       ployer which is not by law authorized to levy taxes as described above,
  3       but which prepares a budget for its expenses for the ensuing year and
  4       presents the same to a governing body which is authorized by law to levy
  5       taxes as described above, may include in its budget an amount sufficient
  6       to make its contributions under this act which may be in addition to all
  7       other taxes authorized by law. Such governing body to which the budget
  8       is submitted for approval, may levy a tax sufficient to allow the partici-
  9       pating employer to make its contributions under this act, which tax, to-
10       gether with any other fund available, shall be sufficient to enable the
11       participating employer to make the contributions required by this act.
12             (5) The rate of contribution certified to a participating employer as
13       provided in this section shall apply during the fiscal year of the partici-
14       pating employer which begins in the second calendar year following the
15       year of the actuarial valuation. For the fiscal year commencing in calendar
16       year 1993, the employer rate of contribution for the state of Kansas and
17       for participating employers under K.S.A. 74-4931 and amendments
18       thereto shall be 3.1% of the amount of compensation upon which mem-
19       bers contribute during the period. For the fiscal year commencing in
20       calendar year 1994, the employer rate of contribution for the state of
21       Kansas and for participating employers under K.S.A. 74-4931 and amend-
22       ments thereto shall be 3.2% of the amount of compensation upon which
23       members contribute during the period. For the fiscal year commencing
24       in calendar year 1994, the employer rate of contribution for participating
25       employers other than the state of Kansas shall be 2.2% of the amount of
26       compensation upon which members contribute during the period. Except
27       as specifically provided in this section, for the fiscal year commencing in
28       calendar year 1995, the rate of contribution certified to a participating
29       employer shall in no event exceed such participating employer's contri-
30       bution rate for the immediately preceding fiscal year by more than 0.1%
31       of the amount of compensation upon which members contribute during
32       the period. Except as specifically provided in this section, for fiscal years
33       commencing in calendar year 1996 and in each subsequent calendar year,
34       the rate of contribution certified to the state of Kansas shall in no event
35       exceed the state's contribution rate for the immediately preceding fiscal
36       year by more than 0.2% of the amount of compensation upon which
37       members contribute during the period. Except as specifically provided in
38       this section, for fiscal years commencing in calendar year 1997 and in
39       each subsequent calendar year, the rate of contribution certified to par-
40       ticipating employers other than the state of Kansas shall in no event ex-
41       ceed such participating employer's contribution rate for the immediately
42       preceding fiscal year by more than 0.15% of the amount of compensation
43       upon which members contribute during the period. There shall be an

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  1       employer rate of contribution certified to the state of Kansas and partic-
  2       ipating employers under K.S.A. 74-4931 and amendments thereto. There
  3       shall be a separate employer rate of contribution certified to all other
  4       participating employers other than the state of Kansas.
  5             (6) The actuarial cost of any legislation enacted in the 1994 session
  6       of the Kansas legislature will be included in the June 30, 1994, actuarial
  7       valuation in determining contribution rates for participating employers.
  8             (7) The actuarial cost of the provisions of K.S.A. 1998 Supp. 74-4950i
  9       will be included in the June 30, 1998, actuarial valuation in determining
10       contribution rates for participating employers. The actuarial accrued lia-
11       bility incurred for the provisions of K.S.A. 1998 Supp. 74-4950i shall be
12       amortized over 15 years.
13             (8) Except as otherwise provided by law, the actuarial cost of any
14       cost-of-living adjustment or postretirement benefit adjustment enacted by
15       the Kansas legislature shall be reflected in the employer contribution rate
16       in the fiscal year immediately following such enactment.
17             (9) The board with the advice of the actuary may fix the contribution
18       rates for participating employers joining the system after one year from
19       the first entry date or for employers who exercise the option contained
20       in K.S.A. 74-4912 and amendments thereto at rates different from the
21       rate fixed for employers joining within one year of the first entry date.
22             (9) (10) For employers affiliating on and after January 1, 1999, the
23       rates of contribution certified to the participating employer as provided
24       in this section shall apply during the fiscal year immediately following
25       such certification, but the rate of contribution during the first year fol-
26       lowing the employer's entry date shall be equal to 7% of the amount of
27       compensation on which members contribute during the year. Any amount
28       of such first year's contribution which may be in excess of the necessary
29       current service contribution shall be credited by the board to the respec-
30       tive employer's prior service liability.
31             (10) (11) Employer contributions shall in no way be limited by any
32       other act which now or in the future establishes or limits the compen-
33       sation of any member.
34             (11) (12) Notwithstanding any provision of law to the contrary, each
35       participating employer shall remit quarterly, or as the board may other-
36       wise provide, all employee deductions and required employer contribu-
37       tions to the executive secretary for credit to the Kansas public employees
38       retirement fund within three days after the end of the period covered by
39       the remittance by electronic funds transfer. Remittances of such deduc-
40       tions and contributions received after such date are delinquent. Delin-
41       quent payments due under this subsection shall be subject to interest at
42       the rate established for interest on judgments under subsection (a) of
43       K.S.A. 16-204 and amendments thereto. At the request of the board,

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  1       delinquent payments which are due or interest owed on such payments,
  2       or both, may be deducted from any other moneys payable to such em-
  3       ployer by any department or agency of the state.
  4             Sec.  3. K.S.A. 1998 Supp. 74-4967 is hereby amended to read as
  5       follows: 74-4967. (1) Upon the basis of an annual actuarial valuation and
  6       appraisal of the system conducted in the manner provided for in K.S.A.
  7       74-4908 and amendments thereto, the board shall certify, on or before
  8       July 15 of each year to each participating employer an actuarially deter-
  9       mined estimate of the rate of contribution which shall be required to be
10       paid by each such participating employer to pay all of the liabilities which
11       shall accrue under the system from and after the entry date as determined
12       by the board, upon recommendation of the actuary. Such rate shall be
13       uniform for all participating employers, and shall be comprised of a rate
14       for benefits accruing after June 30, 1993, and a rate for amortization of
15       the additional liability for benefits provided by this act which is attribut-
16       able to service rendered before July 1, 1993. Such additional liability shall
17       be amortized over a period of 40 years commencing on July 1, 1993, by
18       annual payments that increase 4% for each year remaining in the amor-
19       tization period. The employer's rate of contribution determined under
20       this section shall not include the costs of administration of the system.
21             (2) The board shall determine for each employer separately an
22       amount sufficient to amortize over a period of not to exceed 40 years all
23       liabilities for past service costs which shall have accrued at the time of
24       entry into the system. On the basis of such determination the board shall
25       annually certify to each participating employer separately an actuarially
26       determined estimate of the rate of contribution which shall be required
27       to be paid by that participating employer to pay all of the liabilities for
28       such past service costs. Such rate shall be termed the employer's prior
29       service contribution. The board may enter into agreements with any par-
30       ticipating employer which has employees or retirants under the special
31       pension systems established under K.S.A. 13-14a01 to 13-14a14, inclu-
32       sive, and amendments thereto or K.S.A. 14-10a01 to 14-10a15, inclusive,
33       and amendments thereto, for the purpose of scheduling the payment of
34       such past service costs in an orderly manner which will tend to stabilize
35       the annual total financial burden on such employers in meeting their
36       present and future obligations under this system and such special systems,
37       but in no event shall the annual prior service contribution be less than
38       the interest cost on the total of such past service liability.
39             (3) Each participating employer shall appropriate and pay to the sys-
40       tem a sum sufficient to satisfy the obligations under this act as certified
41       by the board.
42             (4) Each participating employer is hereby authorized to pay the em-
43       ployer's contribution from the same fund that the compensation for which

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  1       such contribution is made is paid from or from any other funds available
  2       to it for such purpose. Each employer may levy annually at the time of
  3       its levy of taxes, a tax which may be in addition to all other taxes authorized
  4       by law for the purpose of making its contributions under this act, and, in
  5       the case of cities and counties, to pay a portion of the principal and in-
  6       terest on bonds issued by cities under the authority of K.S.A. 12-1774,
  7       and amendments thereto, for the financing of redevelopment projects
  8       upon property located in such county which tax, together with any other
  9       fund available, shall be sufficient to enable it to make such contribution.
10       In lieu of levying the tax authorized in this subsection, any taxing subdi-
11       vision may pay such costs from any employee benefits contribution fund
12       established pursuant to K.S.A. 12-16,102 and amendments thereto.
13             (5) Employer contributions shall in no way be limited by any other
14       act which now or in the future establishes or limits the compensation of
15       any member.
16             (6) The rate of contribution certified to each participating employer
17       as provided in this section shall apply during the fiscal year of such par-
18       ticipating employer which begins in the second calendar year following
19       the year of the actuarial valuation, but the rate of contribution during the
20       first year following the employer's entry date shall be equal to 16% of the
21       amount of compensation on which members contribute during the year.
22             (7) Each participating employer shall remit quarterly, or as the board
23       may otherwise provide, all employee deductions and required employer
24       contributions to the executive secretary for credit to the Kansas public
25       employees retirement fund within 20 days after the end of the period
26       covered by the remittance or within 25 days after forms or written in-
27       structions from the system were mailed by the system to such employer,
28       whichever is later. Remittances of such deductions and contributions re-
29       ceived after such date are delinquent. Delinquent payments due under
30       this subsection (7) shall be subject to interest at the rate established for
31       interest on judgments under subsection (a) of K.S.A. 16-204 and amend-
32       ments thereto. At the request of the board, delinquent payments which
33       are due or interest owed on such payments, or both, may be deducted
34       from any other moneys payable to such employer by any department or
35       agency of the state.
36             (8) Except as otherwise provided by law, the actuarial cost of any
37       cost-of-living adjustment or postretirement benefit increase enacted by the
38       Kansas legislature shall be reflected in the employer contribution rate in
39       the fiscal year immediately following such enactment. 
40       Sec.  4. K.S.A. 20-2605 and K.S.A. 1998 Supp. 74-4920 and 74-4967
41       are hereby repealed.
42        Sec.  5. This act shall take effect and be in force from and after its
43       publication in the statute book.