Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


February 16, 2021


The Honorable Steve Johnson, Chairperson
House Committee on Insurance and Pensions
Statehouse, Room 276A-W
Topeka, Kansas 66612
Dear Representative Johnson:
SUBJECT: Fiscal Note for HB 2111 by House Committee on Insurance and Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2111 is
respectfully submitted to your committee.
Under current law, employees of the Kansas Department of Corrections (KDOC) are
members of either the Kansas Public Employee Retirement System (KPERS) State Group or the
Corrections Groups. Both groups are part of regular KPERS. The Corrections Groups are
subgroups of the KPERS State Group. Generally, the requirements for normal retirement are
different under the Corrections Groups and members may retire earlier than KPERS State Group
members. Eligibility for membership in the Corrections Groups is based on certain job classes
that have regular contact with adult offenders.
HB 2111 would make KDOC an eligible employer for the Kansas Police and Firemen’s
(KP&F) Retirement System on July 1, 2021 and would make “security officers” eligible for KP&F
membership for both future and prior service. “Security officers” would include all uniformed
corrections officers, corrections counselors, unit team managers and supervisors, classification
administrators, maintenance, industries, and power plant personnel who are in regular contract
with residents, and certain correctional facility administrative positions if the incumbent promoted
to the position from an otherwise eligible position that was held for at least three years. The bill
would allow current members to elect to stay in KPERS or move to KP&F after July 1, 2021.
The Division of the Budget and the Governor would be required to include all necessary
employer contributions in the budget resulting from the shift of the Department of Corrections to
KP&F. After the effective date of affiliation with KP&F, security officer employees in the
Department of Corrections would pay an employee contribution rate of 7.15 percent. Currently,
they pay a contribution rate of 6.0 percent.
The KPERS actuary completed a cost estimate for HB 2111. Moving KPERS correctional
members to KP&F would reduce the overall KP&F employer contribution rate, as approximately
$105.0 million in payroll would be added to the overall KP&F Group. The resulting KP&F
The Honorable Steve Johnson, Chairperson
Page 2—HB 2111

employer contribution rate is estimated to reduce from 22.99 percent to 20.54 percent with the
enactment of HB 2111. However, for KDOC, the agency would see a net increase in employer
contribution rates, as the bill would move this group of employees from the KPERS Correctional
Group (“A” Group rate of 14.14 percent and “B” Group rate of 14.84 percent) to KP&F (employer
contribution rate of 20.54 percent), which is a net increase of 5.7 percent to 6.4 percent, depending
on the original membership of the eligible security officers.
KPERS and KDOC estimate that the total employer contributions for KDOC would
increase by $7.2 million from the State General Fund with the enactment of the bill. However,
KPERS notes that other KP&F employers would have a lower contribution rate, which would
reduce employer contributions for these agencies by a net $1.5 million. As a result, the overall
effect on state expenditures for KP&F employer contributions would be an increase of $5.7 million
from all funding sources ($7.2 million - $1.5 million = $5.7 million). The overall effect to the
State General Fund would depend on the salary funding mix of the other KP&F employers.
In addition, KPERS notes that the bill would provide KP&F membership credit for past
service for these members. When an employer affiliates with KP&F for past service, there is a
resulting increase in the unfunded actuarial liability of the KP&F Group. The increased unfunded
liability must be funded by the newly affiliated employer so the other KP&F employers are not
paying the cost of the new members. KPERS indicates that current law does provide for some
KPERS assets to be transferred to KP&F to help cover the cost of the additional unfunded liability.
This law would allow an amount equal to two times the member account balances to be transferred
from KPERS to KP&F. For the KPERS Correctional Group, the amount of unfunded liability left
after the asset transfer would be $96.2 million. If this payment cannot be made by KDOC or the
state in a lump sum, the amount can be amortized over 15 years, which would require an annual
payment of $10.7 million, all from the State General Fund.
For the transition and ongoing support to the Department of Corrections, KPERS estimates
it would need $67,068 for 1.00 FTE position, all from the KPERS Trust Fund. The estimate
includes $44,904 for salary and wages and $22,164 for fringe benefits. The position would also
assist with testing information technology changes. Any fiscal effect associated with HB 2111 is
not reflected in The FY 2022 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Randy Bowman, Corrections
Jarod Waltner, KPERS