Brief (1)
The bill as amended would appropriate financing in FY 2001 of $150,000 from the State General Fund to the Legislative Coordinating Council for the purpose of employing an independent actuary to conduct an actuarial audit of the consulting actuary's services and valuations that are provided to the Kansas Public Employees Retirement System (KPERS). Any unexpended funds would be reappropriated to FY 2002 for the same purpose.
The bill as introduced had included an amount of $250,000 for an actuarial audit.
Background
The Governmental Finance Officers Association's recommended practices include having a review of a retirement plan's actuarial valuations performed by an independent actuary at least once every ten years. The purpose of such a review is to provide an independent critique of the reasonableness of the actuarial methods and assumptions in use and the resulting actuarially computed contributions and liabilities.
KSA 2000 Supp. 74-4908a requires an independent actuarial audit and evaluation of the KPERS actuary's work at least once every six years. The last audit was performed in FY 1996, shortly after the 1995 Legislature established the auditing requirement. The next actuarial audit would be due no later than FY 2002 under current statutory provisions. The Legislative Coordinating Council had requested and the Governor's FY 2002 recommended budget for the Legislature includes financing of $100,000 from the State General Fund for actuarial services in conjunction with a KPERS audit.
Representative Lloyd Stone, Chairperson of the Joint Committee on Pensions, Investments, and Benefits, testified in favor of the bill. Representative Stone cited a recent actuarial audit of the actuary for the Texas Teachers Retirement System at a cost of $100,000. Representative Stone suggested that the amount in the bill as introduced could be reduced from $250,000 to $150,000. The House Committee amended the lower amount into the bill.
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