Increasing the amount of retirant compensation subject to the statutory employer contribution rate to the first $50,000 of compensation earned by a retirant in a calendar year and for a period commencing July 1, 2023, and ending December 31, 2024, requiring participating employers to pay only the statutory employer contribution rate on all compensation of a retirant employed in a covered position.
This change in law serves to encourage retired public employees to return to work without jeopardizing their retirement benefits. By eliminating the earnings limitations for a designated time frame and extending employer contributions to a higher threshold, the bill aims to attract experienced retirees back into the workforce where vacancies exist, especially in critical positions that struggle to find skilled professionals.
House Bill 2195 aims to amend laws surrounding the Kansas Public Employees Retirement System, particularly focusing on regulations related to re-employment of retirants. The bill requires that participating employers contribute only the statutory employer contribution rate on all compensation of a retirant employed in a covered position for a specified period starting from July 1, 2023, until December 31, 2024. Furthermore, the bill increases the threshold of compensation that determines the statutory employer contribution rate applicable to retirants, raising the limit from $25,000 to $35,000 in a calendar year.
Notably, the bill seeks to navigate the fine balance between encouraging re-employment and preserving the integrity of the retirement system. Critics may argue this could lead to potential abuse of the retirement system, where individuals may retire temporarily to benefit from the increased contributions while still earning a significant income through re-employment. Local governments and school districts may express concerns about the financial implications and the effectiveness of these policies in improving workforce availability.