SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 23
As Amended by Senate Committee of the Whole

Brief*
SB 23, as amended, would amend law governing the
Kansas Public Employees Retirement Trust Fund and
investment standards to increase a statutory limitation (“cap”)
on alternative investments, from 15.0 percent to 20.0 percent,
placed on the KPERS Board of Trustees (Board).
Under current law, enacted in 2012, the investment of
alternative assets by the Board is limited to 15.0 percent of
the total investment assets of the fund as a percentage of the
Retirement System’s total investments. “Alternative
investment” is defined in trust fund law to include a broad
group of investments that are not one of the traditional asset
types of public equities, fixed income, cash, or real estate
(e.g., private equity, private credit, hedge funds,
infrastructure, and commodities).

Background
The bill was introduced by the Joint Committee on
Pensions, Investments and Benefits. A companion bill, HB
2103, has been introduced in the House.
[Note: The Joint Committee met in December 2022 and,
as one of the topics discussed, reviewed a request from the
KPERS Board of Trustees to remove the alternative
investments cap, while maintaining other statutory criteria
placed on the investment of alternative assets. The Joint
Committee recommended the introduction of this legislation.
____________________
*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.kslegislature.org
In its November 2023 meeting, the Joint Committee again
considered the topic of SB 23 and HB 2103 and
recommended passage of legislation addressing the statutory
alternative investment cap and that such legislation be
amended to make the change in Board authority effective on
publication in the Kansas Register.]

Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing on February 1, 2023,
the Executive Director and the Chief Investment Officer,
KPERS, provided proponent testimony on behalf of the
Board, stating if KPERS were to reach the 15.0 percent
alternative investments cap, new investments in private
equity and infrastructure would stop and could not be
resumed until exposure fell below the cap. The
representatives indicated this restriction would limit KPERS’
ability to diversify these investments across economic cycles,
increasing risk, and could result in KPERS losing access to
top tier investment managers, potentially reducing return.
No other testimony was provided.

Senate Committee of the Whole
The Senate Committee of the Whole amended the bill to
increase the cap on alternative investments from 15.0 percent
to 20.0 percent and to remove a provision delegating the
selection of the overall cap to the Board that was included in
the bill, as introduced. The Senate Committee of the Whole
amendment also updates statutory references to incorporate
2023 changes to pensions investment law. [Note: The Senate
Committee of the Whole adopted two amendments to SB 23;
the amendments modify the same section of law; one would
maintain the policy of the underlying bill to eliminate the
statutory cap and delegate authority to the KPERS Board to
establish such limitation. The second amendment restores

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current law, as updated by changes in 2023, with the 15.0
percent cap and increases this limitation to 20.0 percent.]

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, KPERS indicates
enactment of the bill would have no fiscal effect.
Retirement System; KPERS Board of Trustees; investment policy; alternative
investments


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Statutes affected:
As introduced: 74-4921
{As Amended by Senate Committee of the Whole}: 74-4921, 74-49