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 C. Proffitt, Director Laura Kelly, Governor


February 1, 2024


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 2563 by House Committee on Financial Institutions and
Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2563 is
respectfully submitted to your committee.
HB 2563 would provide a one-time $500 payment for certain retirees and disability
recipients in the Kansas Public Employees Retirement System (KPERS), the Kansas Police and
Fireman’s Retirement System (KP&F), the State School Retirement System, and the Judges
Retirement System. To qualify for this one-time payment, the retirant must have retired on or
before July 1, 2014. For disability recipients, the disability had to occur on or before July 1, 2014.
All payments would be made on or after October 1, 2024.
According to KPERS, 66,538 KPERS retirees, beneficiaries, or KP&F disability recipients
(or approximately 58.0 percent of these groups) would be eligible for the one-time $500 payment,
as of the December 21, 2022 actuarial valuation. This total would include 50,048 individuals from
state employers, 15,920 from local employers, and 570 disability recipients. In total, the bill would
authorize $33.3 million in one-time payments ($500 one-time payment X 66,538 eligible
beneficiaries = $33,269,000).
KPERS notes that the bill would authorize payments from either the KPERS Fund or the
Group Insurance Fund, depending on the beneficiary. In addition, HB 2563 contains no
appropriations from the State General Fund. As a result, current statutes require the consulting
actuary to estimate the fiscal effect of the bill, including the length of the amortization. The actuary
completed a cost estimate of the benefit by amortizing the cost of the one-time payments over ten
years. The following would be the estimated fiscal effect if HB 2563 was enacted, including the
estimated effects on the unfunded actuarial liability (UAL) and employer contribution rates:
The Honorable Nick Hoheisel, Chairperson
Page 2—HB 2563

Estimate Fiscal Effect—HB 2563
Dollars in Millions
FY 2025 FY 2025 FY 2026
Estimated Additional Additional
UAL Employer Employer
Change Contributions Contributions
State Groups
State/School $ 24.2 $ 2.96 $ 3.05
KP&F—State 0.3 0.03 0.03
Judges 0.1 0.01 0.01
Subtotal—State Groups $ 24.6 $ 3.00 $ 3.09
Local Groups
Local $ 6.4 $ 0.78 $ 0.81
KP&F—Local 1.7 0.20 0.21
Subtotal—Local Groups $ 8.1 $ 0.98 $ 1.02
Total $ 32.7 $ 3.98 $ 4.11
Current FY 2025 Estimated Estimated
Employer Cont. Rate FY 2025 Rate FY 2026 Rate
State Groups
State/School 11.42% 11.47% 11.61%
KP&F—State 23.10% 23.15% 24.66%
Judges 21.35% 21.39% 23.10%
Local Groups
Local 9.26% 9.30% 9.64%
KP&F—Local 23.10% 23.13% 24.64%
The Division of the Budget notes that of the additional $3.0 million in state employer
contributions that would be required in FY 2025, approximately $2.6 million would be from the
State General Fund, with the assumption that the State General Fund covers approximately 85.0
percent of the State/School Group employer contributions. For FY 2026, a similar fiscal effect
would be expected.
KPERS notes that the additional administrative functions of making the one-time payment
would be accomplished with the agency’s existing staff. The Division of the Budget estimates that
any administrative costs associated with issuing the one-time payment would be negligible. Any
fiscal effect associated with HB 2563 is not reflected in The FY 2025 Governor’s Budget Report.

Sincerely,

Adam C. Proffitt
Director of the Budget
cc: Jarod Waltner, KPERS