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Minutes for SB137 - Committee on Financial Institutions and Insurance

Short Title

Death benefits for certain KP&F surviving spouses.

Minutes Content for Thu, Feb 16, 2017

Chairperson Longbine opened the hearing on SB137.  Eileen Ma presented a brief overview of the the bill and stood for questions.  There were none.

Alan Conroy, Executive Director, Kansas Public Employees Retirement System (KPERS) presented informational testimony on the Kansas Police and Fire (KP&F) members' service-related death benefit.  Over the past five years, there have been approximately two to three occurrences of service-connected deaths annually.  Currently, when a member dies due to service-connected causes, the surviving spouse is entitled to 50 percent of the member's final average salary at the time of death.  Additionally, any surviving dependent children are entitled to 10 percent of the member's final average salary for each child, but the total benefit cannot exceed 75 percent of the final average salary.  Under SB137, the surviving spouse benefit would change to the greater of 50 percent of the member's final average salary OR the amount that the member's retirement benefit would have been had the member elected to retire on the first day of the month following the date of death and elected the joint and 100 percent survivor benefit option.  There is no change in the surviving children's benefits, but the total cap on benefits would increase from 75 percent to 90 percent of the final average salary.

Mr. Conroy explained the projected increase in the unfunded actuarial liability would also impact the actuarial liability portion of the employer's contribution for a total of 0.02 percent on total contributions for all KP&F employers resulting in less than $100,000.  The increase in the employer contribution rate would result in additional revenue to the Trust Fund.  Mr. Conroy anticipated that some upgrades to existing technology systems would be needed, but the upgrades would not require significant changes and could be absorbed within existing resources.  (Attachment 1)

Mr. Conroy responded to questions from Senators Suellentrop,  Billinger, Wilborn, and Pyle.

Ed Klumpp appeared in support of SB137.  He told the committee this bill is about fairness to the surviving family and spouse of a KP&F member who dies prior to retirement.  Passing the bill is the right thing to do and it assures the family receives the best KP&F benefit the deceased loved one earned in the retirement system.  (Attachment 2)  Mr. Klumpp responded to a question from Senator Billinger about if the the effective date would be retroactive.  Mr. Klumpp explained that his organization would like to see the effective date be July 1, 2016, which would enable benefits for one officer's children who would not otherwise be eligible for benefits.

Dennis Phillips presented supportive testimony.  He also related that enacting this policy is the fair and right thing to do for the KP&F members who die in the line of duty, putting a financial strain on the surviving family with ongoing payments, medical bills, educational and every day expenses, but with reduced income to meet those expenses.  (Attachment 3)

Chairperson Longbine pointed the committee's attention to the written-only proponent testimony of Blaine Dryden, President of the Kansas State Lodge Fraternal Order of Police (FOP).  (Attachment 4)  The Chairperson called for any other conferee or written-only testimony;  There was none. 

Chairperson Longbine closed the hearing on SB137.