Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


March 6, 2019


The Honorable Jim Kelly, Chairperson
House Committee on Financial Institutions and Pensions
Statehouse, Room 581-W
Topeka, Kansas 66612
Dear Representative Kelly:
SUBJECT: Fiscal Note for HB 2142 by House Committee on Financial Institutions and
Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2142 is
respectfully submitted to your committee.
HB 2142 would increase the lump-sum death benefit to a retirement system member’s
beneficiary from $4,000 to $10,000. The benefit change would apply to all retirement groups
including the KPERS State/School Group, the KPERS Local Group, the Kansas Police and
Firemen’s System (KP&F) and the Judges Group.
According to KPERS, increasing the death benefit would increase the unfunded actuarial
liability for all retirement groups by $261.8 million. The increase in the unfunded actuarial liability
would result in increased employer contribution rates for all retirement groups (including KPERS
Local Group and KP&F local affiliated employers). KPERS estimates $27.3 million from all funds
would be required from all groups in the first year. The estimate assumes the increase to the
unfunded actuarial liability would be amortized over 20 years. Of the total amount, $20.0 million
from all funds would be for the KPERS State/School Group. The Division of the Budget estimates
approximately $16.7 million would be from the State General Fund.
KPERS notes that under current law, changes to benefit provisions must be funded in the
fiscal year immediately after the changes are passed. As a result, the employer contribution rate
changes associated with HB 2142 would take effect in FY 2020. For example, the KPERS
State/School Group employer contribution rate for FY 2020 is 14.41 percent. If HB 2142 were
enacted, the rate would increase to 14.84 percent, requiring the additional amounts mentioned
above in FY 2020.
The Honorable Jim Kelly, Chairperson
Page 2—HB 2142

Increasing the death benefit would require KPERS to modify its information technology
system and change publications and educational materials. The agency estimates the costs
associated with these adjustments could be absorbed within existing resources. Any fiscal effect
associated with HB 2142 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Jarod Waltner, KPERS


Statutes affected:
As introduced: 74-4989