Kansas Coalition of Public Retirees
Position Paper
Approved January 11, 2011
The Kansas Coalition of Public Retirees was formed in 2004 in response to the lack of a cost-of-living adjustment (COLA) for KPERS retirees. KPERS retirees have been without a COLA since 1998 and by 2005 the cost-of-living had increased by nearly 20 percent (19.8) as measured by the Consumer Price Index ( CPI ). Today (2011) this key indicator ( CPI ) has risen to more than 34.5 percent. In other words, the KPERS retiree has lost more than one-third of his/her effective buying power since 1998. Compelling arguments have been made that seniors are even more severely impacted by inflation than other citizens in the economy. The rising cost of fuel, food, and especially medical care, each fall heavily on the senior population. Because of these factors, the Coalition voted overwhelmingly to pursue an immediate 3 percent annual COLA and some modified form of annual adjustment tied to the CPI or somehow indexed to account for inflation.
While we understand and deeply respect the difficult funding issues concerned with this request, the Coalition feels we are not in a position to give tacit approval and ask that retirees support and accept a COLA of less than 3 percent. Those retired for some time are especially hard hit by the 12 year absence of any COLA adjustment. The Coalition remains sincerely committed to working with the Kansas Legislature in seeking a lasting resolution to this difficult problem. The formation of the Joint Committee on Pensions, Benefits, and Investments, and the topic now at hand provides a unique opportunity for the retiree and the Legislature to work towards a long term solution for, not only the immediate COLA problem, but also to provide some form of periodic adjustment to KPERS retirees in the face of rising inflation.
Public employees contributed a mandated share to KPERS during their working years. Moreover, the public employees were never offered the opportunity to reduce or lower their share of contributions. The public employer(s) initially made significant contributions to the KPERS fund. However, for whatever reason, the legislature, for at least 15 years failed to fund the system as required by the actuary. As a result, retired public employees are especially hard hit by rising inflation and have not been granted a COLA adjustment since 1998.
Many public retirees feel they received below market compensation during their working careers with the promise that they would be assured a comfortable pension upon retirement. Now, years later and after 12 years of no COLA adjustment, coupled with mounting inflationary pressures, public retirees are ironically asked to forego any cost-of-living increase in the name of fiscal responsibility. This is the primary reason why the retiree’s are upset and in some cases downright angry. For these reasons, the Coalition of Public Retirees believes we cannot change our request for an immediate annual 3 percent COLA increase.
We sincerely wish to work with the Legislature on a resolution to this problem.