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


March 6, 2023


The Honorable Nick Hoheisel, Chairperson
House Committee on Financial Institutions and Pensions
300 SW 10th Avenue, Room 582-N
Topeka, Kansas 66612
Dear Representative Hoheisel:
SUBJECT: Fiscal Note for HB 2252 by House Committee on Financial Institutions and
Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2252 is
respectfully submitted to your committee.
Under current law, the KPERS, Kansas Police and Fireman’s, and Judges retirement plans
do not include a cost-of-living adjustment (COLA). HB 2252 would provide a permanent, ad hoc
COLA for retirees who have been retired for at least five years, as of July 1, 2022. The COLA
would be structured to provide the following:
Retirement Ad Hoc
Date Before COLA
July 1, 2018 1.0%
July 1, 2015 2.0%
July 1, 2012 3.0%
July 1, 2009 4.0%
July 1, 2006 5.0%
The bill would cap the benefit from any COLA authorized with the bill at $200 per month.
In addition, the bill would authorize a COLA for KPERS members on long-term disability.
According to the KPERS actuary, the enactment of SB 198 would make 90,969 retirees
and beneficiaries (or 82.3 percent of the 110,586 KPERS retirees and beneficiaries, as of the
December 31, 2021, actuarial valuation) eligible for a COLA. The KPERS actuary completed a
cost study of the COLA proposal and estimates the bill would increase the unfunded actuarial
liability by $353.5 million for all KPERS retirement plans under current actuarial assumptions.
The Honorable Nick Hoheisel, Chairperson
Page 2—HB 2252

Although the bill does not specify the length of the amortization period to fund the COLA, the
actuary assumed an amortization period of 15 years. The following table summarizes the actuarial
cost analysis by group:
Estimated Fiscal Effect
Dollars in Millions
Employer Additional
UAL Contribution First Year
KPERS Group Increase Rate Increase Contribution
State/School $254.4 0.42 % $22.6
KP&F—State 6.7 1.08 % 0.6
Judges 2.5 0.86 % 0.3
Subtotal—State $263.6 $23.5
Local 48.3 0.21 % 4.3
KP&F—Local 41.7 0.86 % 3.7
Subtotal—Local $ 90.0 $ 8.0
Total $353.6 $31.5
The Division of the Budget notes that instead of amortizing the UAL over 15 years, the
state could choose to fund its portion of the UAL increase with a lump-sum payment of $263.6
million from the State General Fund to KPERS for the state groups in FY 2024. With this scenario,
the state would not have an additional employer contribution rate increase associated with the
COLA or additional first-year contributions, as shown in the above table. Any fiscal effect
associated with HB 2252 is not reflected in The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Jarod Waltner, KPERS