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 22, 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 2428 by House Committee on Financial Institutions and
Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2428 is
respectfully submitted to your committee.
HB 2713 would make the Kansas Department of Corrections (KDOC) and the Kansas
Department of Wildlife and Parks (KDWP) eligible employers for the Kansas Police and
Firemen’s Retirement System (KP&F) on July 1, 2023. The bill would convert certain positions
within those agencies from KPERS membership to KP&F membership for future service only,
including certain law enforcement officers at KDWP, and certain corrections officers at KDOC.
The Kansas Public Employees Retirement System (KPERS) indicates there are two costs
associated with the enactment of HB 2428, including the actuarial costs from the estimated 2,250
positions that would move to the KP&F Retirement System and additional costs for KPERS to
administer the bill.
Actuarial Costs
When an employer affiliates with KP&F for future service, the employer begins paying the
KP&F employer contribution rate that has been certified for KP&F employers, which would be
22.86 percent in FY 2024. The following table illustrates the estimated employer costs associated
with the estimated 2,250 positions that would move to KP&F with HB 2428:
The Honorable Nick Hoheisel, Chairperson
Page 2—HB 2428

Estimated
FY 2024 FY 2024 KP&F FY 2024 Increased
Current Employer Employer Rate Employer
Current Group Contribution Rate Contribution Rate Difference Contributions
KPERS--Correctional Group A (KDOC) 12.99% 22.86% 9.87% $ 9,300,000
KPERS--Correctional Group B (KDOC) 13.73% 22.86% 9.13% 500,000
KPERS (KDWP) 11.42% 22.86% 11.44% 2,500,000
Total $ 12,300,000
Of the total estimated cost of $12.3 million, approximately $9,800,000 would be from the
State General Fund for KDOC and $2.5 million would be from all funding sources for KDWP,
including federal and fee funds. The Division of the Budget notes that The FY 2024 Governor’s
Budget Report includes expenditures totaling $9.6 million from the State General Fund in the
Department of Corrections and $2.5 million from all funding sources in the Department of Wildlife
and Parks for this conversion.
The addition of the 2,250 members to KP&F affected by the bill would increase the payroll
base of the KP&F Group without adding any past liability. Dividing the cost of the existing
unfunded actuarial liability over a larger payroll base would decrease future employer
contributions for the KP&F Group. Also, this new group of employees would increase the normal
cost of benefits for the KP&F Group. However, the decrease in the unfunded actuarial liability
payment would be larger than the normal cost, so the net effect would be lower future KP&F
employer contribution rates from the change. This change would first be reflected in the FY 2026
employer contributions rates for the state and calendar year 2025 employer contribution rates for
local governments. The estimated effect on the state KP&F employer contribution rate for FY
2026 is a decrease of 1.59 percent. However, with the additional KP&F payroll, the total
contributions in FY 2026 are expected to increase by about $18.5 million across all KP&F
employers. Local KP&F employers would see a decrease in the KP&F employer contribution rate
starting in calendar year 2025 of an estimated 1.59 percent, or about $9.0 million across all 112
Local KP&F employers.
The KPERS actuary estimates that the transfer of the KDOC and KDWP KPERS members
to KP&F would reduce the KPERS State/School Group’s unfunded actuarial liability by about
$54.0 million as these employees’ future benefits would shift to KP&F.
The 2,250 positions affected by the bill would experience increased employee retirement
contributions. With current rates, these members contribute 6.0 percent of compensation to
KPERS. After converting to KP&F, these members would contribute 7.15 percent of
compensation.
Administrative Costs
KPERS would require additional administrative expenses totaling $79,791 from the
KPERS Trust Fund, including 1.00 FTE Benefits Analyst II position that would be required to
provide ongoing support to the Department of Corrections and the Department of Wildlife and
The Honorable Nick Hoheisel, Chairperson
Page 3—HB 2428

Parks. The cost estimate includes $54,495 for salaries and wages and $25,296 for fringe benefits.
In addition, the bill would require updates to the KPERS information technology system; however,
any additional costs would be negligible. Any fiscal effect associated with the administrative
portion of HB 2428 is not reflected in The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Jarod Waltner, KPERS