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Thursday, March 01, 2012

Protect Our Kansas Workers not Wall Street

By: Terry Forsyth
As the Kansas Legislature works to "reform" the state's public pension system, there have been numerous figures thrown out to justify moving the system to a defined-contribution plan.  Governor Brownback has often stated  the current system cannot be sustained.  However, the facts show is that what can't be sustain is the very system the Governor and his allies in the Legislature want to thrust upon public workers and retirees.

Now, ultra-conservative front groups like the Kansas Policy Institute and Taxpayers United of America want us to believe that it's the employee's fault. Nobody’s blaming the victims of the financial collapse for the wreckage Wall Street caused, and why would they?  So why would anyone blame public workers for a shortfall that they didn’t cause?

By everyone's admission, the elephant in the room  is KPERS' current $8.3 billion unfunded actuarial liability (assets vs. what is needed to pay beneficiaries). But, the Governor's plan doesn't address the unfunded liability. In fact, it makes it worse.  Moving the system to a defined-contribution plan will cost the state an additional $10.9 billion compared to the current defined-benefit plan.  More importantly, nothing in the plan being considered by the Legislature will address the unfunded liability.  One cannot argue these statistics from the State's own actuary, Cavenaugh and McDonald.

Perhaps a little history lesson would be beneficial here.  According to the state Division of the Budget, the state, as an employer, has continually failed to fund its obligation to  the pension system (i.e. not paying its portion of the compact with pension members). While at the same time employees have fully paid their share into the system. Absent funding from the employer, you have the resulting unfunded liability. Now, instead of owning up to their responsibility, lawmakers want to shift more responsibility and burden to the employees with a plan design that will not even provide for an adequate retirement benefit.

So, what could possibly be driving so called "fiscal conservatives" to champion such a costly scheme.  Unfortunately, it is not the interests of the tens of thousands of Kansans who patrol our streets, fight the fires, stand a post in our prisons or teach our children.  No, it is a pure ideological desire to shift responsibility for funding the system to the employee and give Wall Street investment firms free reign over the system.

While reform is ultimately necessary in any endeavor, change for the sake of change can quickly make any endeavor a costly, inefficient mistake.  Lawmakers should strive to ensure that any changes made to KPERS truly protect workers and the state as a whole, not simply line the pockets of Wall Street on the backs of Main Street workers and taxpayers.

Terry Forsyth is Chairman of Keeping the Kansas Promise Coaliton.  A organization of public employees including, teachers, firefighters, police officers, state, city and county employees, formed to collectively advocate for fair and affordable reforms to the Kansas Public Employees Retirement System to ensure the long-term solvency of the System.

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