Brief ⁽¹⁾

The bill as amended would provide that after a KPERS participating employer certifies final contribution information of a retiring member, upon which results KPERS makes a retirement benefit calculation, KPERS could take certain actions after discovery of errors in the final report. The bill lists two responses that would be followed by KPERS if errors were found, with different actions relative to situations involving either an overpayment or an underpayment of retirement benefits.

First, if the final amount certified results in an overpayment to a retired member, then the participating employer would be held responsible for making the correct contribution based upon the amount previously certified. The retirement benefit would not be reduced by KPERS even though incorrect contribution information might have inflated the final average salary in such a case. Second, if the final amount certified results in an underpayment to a retired member, then the participating employer would be responsible for reporting the correct amount and remitting the correct contribution. In such a case, the retirement benefit would be adjusted by KPERS, which would recalculate the corrected final average salary of the retired member to determine a higher monthly benefit.

Amendments added by the House Committee would clarify that when an employee who had school employment has an error detected, the participating employer shall be the employer of record, such as a school district or community college, and not the state (which pays the KPERS School contribution for all participating public school employers in Kansas).

Background

The bill was requested by the KPERS Board of Trustees. The House Budget Committee recommended this bill and an amendment to clarify that the participating employer in the case of educational institutions would be the local authority, not the state. Under current law, KPERS must seek recovery of overpayments from the retired member. For underpayments, KPERS recalculates the corrected retirement benefit. The fiscal impact would be shifted to the participating employer since the bill would require payments to KPERS after errors are detected in the amount of contributions certified.

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