SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 172
As Recommended by Senate Committee on
Ways and Means
Brief*
SB 172 would increase the lump-sum death benefit for
the Kansas Public Employees Retirement System (KPERS)
from $4,000 to $6,000, beginning on July 1, 2023.
Background
The bill was introduced by the Senate Committee on
Ways and Means at the request of Senator McGinn.
[Note: Under current law, upon the death of a KPERS
retiree, the retiree’s beneficiary or a funeral establishment
selected by the retiree is paid a lump-sum death benefit of
$4,000. This amount has remained unchanged since 1993.]
Senate Committee on Ways and Means
In the Senate Committee hearing on February 15, 2023,
Senator McGinn testified as a proponent, stating the current
death benefit amount has remained unchanged for 30 years.
Additionally, Senator McGinn indicated the minimum cost for
cremations and burials currently averages around $7,000 and
$11,000 respectively.
Representatives from the Kansas Coalition of Public
Retirees, Kansas Funeral Directors Association (KFDA), and
Kansas National Education Association also provided
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org proponent testimony, generally emphasizing that the last
increase in death benefits occurred in 1993. Additionally, the
KFDA representative indicated the national medium cost of
an adult funeral with viewing and burial for calendar year
2021 was $7,848.
The Executive Director of KPERS provided neutral
information, indicating there are approximately 4,000 KPERS
retiree deaths each year, and the cost of paying those
benefits totals about $14.0 million per year. Speaking to
actuarial costs, the Executive Director explained the bill would
increase the KPERS unfunded actuarial liability (UAL), which
could be offset by a one-time appropriation or amortized over
a 20-year period.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, the KPERS actuary indicates the bill
would increase the total UAL by approximately $108.2 million,
including $78.3 million for the State/School Group. This
actuarial cost could be funded with either a one-time payment
of $78.3 million or amortized over a 20-year period. If
amortized, the employer contribution for the State/School
Group would increase by about 0.13 percent, totaling about
$6.8 million in additional contributions for FY 2024.
2- 172 SB 172–Estimated Fiscal Effect
(Dollars in Millions)
UAL Est.Additional Contributions
KPERS Group Increase FY 2024 FY 2025
State/School $ 78.30 $ 6.76 $ 6.96
KP&F–State 0.60 0.05 0.05
Judges 0.30 0.03 0.03
Subtotal–State$ 79.20 $ 6.84 $ 7.04
Local $ 25.30 $ 2.24 $ 2.31
KP&F–Local 3.80 0.33 0.34
Subtotal–Local$ 29.10 $ 2.57 $ 2.65
TOTAL $108.30 $ 9.41 $ 9.69
In addition to increases in the UAL, the bill would also
increase normal cost rates because the proposed change in
law increases benefits for current and future active members.
For the State/School Group, the normal cost rate increase
totals 0.02 percent, or approximately $900,000, in FY 2024.
Any fiscal effect associated with the bill is not reflected
in The FY 2024 Governor’s Budget Report.
KPERS; pensions; lump-sum death benefit
3- 172